ST. PAUL, Minn. (FOX 9) - UCare’s Medicaid payouts more than doubled in just three years, leading to record losses, the insurer’s demise and a trail of unpaid debts that are threatening to destabilize the state’s healthcare system.
UCare’s Medicaid payments topped $600 million last year
By the numbers:
UCare issued nearly $620 million in Medicaid payments in 2025, the insurer’s final full year of operation.
That is more than double what the private insurer paid out just three years ago, according to data obtained by the FOX 9 Investigators.
This graph was created by Google Gemini using data obtained from the Minnesota Department of Human Services.
UCare was already by far the largest Managed Care Organization (MCO) in Minnesota before the dramatic increase.
MCOs are private insurers contracted by the state to manage Medicaid plans and payments.
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From 2018-2021, UCare paid out $250-300 million per year. No other MCO topped $200 million.
In 2022, that number topped $315 million, according to Medicaid data obtained from the Minnesota Department of Human Services (DHS).
RELATED: How UCare went from record surplus to shutting down
UCare’s record payouts…and record losses
The backstory:
Even though Medicaid payments started increasing, UCare reported a record surplus that year of $325 million. It acknowledged that it was likely an outlier due to unique circumstances created by the pandemic.
The company indicated it was taking steps to prepare for negative impacts in the future and had incorporated reasonable estimates in future pricing and projected financial performance, according to a 2022 financial filing.
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"Such future impacts, while potentially significant and subject to change, are not expected to have a material impact on UCare’s financial position," the company stated.
With 40 years of experience navigating Medicaid, UCare was trusted to forecast shifting demands in the healthcare market.
But the company reported jarring losses the next two years as its Medicaid payments ballooned to nearly $500 million.
In 2024, the company issued $491-million in Medicaid payments while reporting a loss of $478-million.
UCare’s trail of debts
What we know:
Last year, the numbers were so staggering that the state ordered UCare to seek a merger.
The Minnesota Department of Health took control of the insurer in December and is now winding down operations as it shifts members to Medica.
UCare left a trail of debts that is now threatening to destabilize the state’s entire healthcare system.
RELATED: Mayo Clinic, other hospitals, concerned UCare won’t repay $500m debt
The four largest hospital systems in Minnesota (Mayo Clinic, Allina, Fairview and Hennepin Healthcare) are owed nearly $500 million for care already provided or still being provided to UCare members, according to recent court filings.
What they're saying:
An attorney for Allina says those hospitals should have a say in how UCare allocates its remaining resources to "ensure that the failure of UCare does not turn into a domino effect of failures" across the state’s healthcare system.
UCare, which did not respond to repeated requests for comment, stopped making payments on those debts in December.
The unpaid debt is accelerating the financial crisis for Hennepin Healthcare which says it may need to close the state’s largest trauma hospital (Hennepin County Medical Center) if they do not receive emergency funding.
"Hennepin Healthcare continues to provide care for all the patients under those UCare contracts that we have and is not getting paid," Patti Jurkovich, Assistant Hennepin County Attorney said, according to the court transcript.
How did fraud impact UCare?
Why you should care:
The data obtained by the FOX 9 Investigators —which had not been previously reported —sheds new light on UCare’s stunning collapse.
The dramatic increase in payments also raises questions about how much Medicaid fraud impacted the private insurer.
The payment data provided by DHS involved 14 Medicaid programs that have been identified as vulnerable to fraud, according to DHS.
As part of its managed care contract with the state, UCare was required to submit annual integrity reports that could have revealed how much fraud impacted the company’s bottom line.
But DHS refused to release those reports to the FOX 9 Investigators, citing ongoing investigations.
Dig deeper:
A review of court records by the FOX 9 Investigators revealed UCare kept paying several Medicaid providers for years despite credible allegations of fraud and numerous red flags.
UCare did not respond to multiple requests for comment.
The overall fraud in those cases amounted to a small fraction of UCare’s total Medicaid payments, but a former prosecutor said MCOs were "asleep at the wheel" when it came to detecting fraud.
"I’m honestly surprised that someone concerned about the bottom line didn’t say ‘what the hell is going on here?’" said Steve Forrest, a former prosecutor with the state’s Medicaid Fraud Control Unit.
Forrest would not comment on specific investigations but said MCOs and the Department of Human Services (DHS) failed to spot obvious signs of fraud.
"I never saw evidence that DHS or any MCO was appropriately tracking claims within their own systems to ensure claims paid made any sense," Forrest said.
Note: This story is part of a series from the FOX 9 Investigators focusing on the state's response to Medicaid fraud.
The Source: This story uses information FOX 9 Investigators obtained from the Minnesota Department of Human Services and court records.