Medica acquires UCare plans

Minnesota’s health plan landscape is shifting in a big way. Medica has reached an agreement to acquire most of UCare’s health plan contracts, a move that will ultimately lead to UCare winding down operations while Medica assumes coverage for hundreds of thousands of Minnesotans.

For IDD and HCBS providers, the message from state partners and plans is consistent: coverage should continue without interruption, but operations and relationships will continue to evolve through 2026.

What happened

Medica and UCare announced a definitive agreement under which Medica will acquire key UCare contracts and assets, including Medicaid and Affordable Care Act individual and family plans covering more than 300,000 members.

The transaction is expected to close in the first quarter of 2026, pending regulatory approval. Individuals enrolled in UCare plans for 2025 will keep their coverage and benefits through the end of the year.

For 2026, UCare enrollees in programs like MinnesotaCare, the Prepaid Medical Assistance Program, and certain Special Needs BasicCare products are expected to remain in their current plans, with DHS, Medica, UCare, and CMS working through options for integrated Medicare products.

UCare, a long standing nonprofit plan created to serve low income Minnesotans, has faced significant financial strain in recent years, including a reported loss of nearly 500 million dollars in 2024 and the decision to exit the Medicare Advantage market.

State agencies and MNsure have emphasized that members should not experience immediate changes in coverage, premiums, or networks for 2025 and that 2026 coverage transitions will be managed to avoid gaps.

What this means for IDD and HCBS providers

For IDD agencies, this is not just a headline about insurance plans. It touches authorizations, billing workflows, care coordination, and family communication.

A few key implications:

• Payer consolidation: With Medica absorbing UCare’s Medicaid and individual market contracts, many agencies that previously worked with both plans may see more volume flowing through a single payer. That can simplify some processes but also increases the operational impact if something goes wrong with eligibility, authorizations, or claims.

• Continuity of coverage: The agreement and state communications stress that coverage will continue without interruption and that UCare members will keep access to services while the transition unfolds. This is especially important for individuals relying on home and community based services who cannot tolerate gaps in authorizations or provider networks.

• Contracting and network questions: Over time, provider contracts, reimbursement terms, and point of contact at the plan may shift under Medica’s structure. Agencies should expect updated paperwork, new portals or processes, and potentially new expectations around data quality and reporting.

• Families already under stress: Many families served by IDD agencies are juggling renewals, letters about redeterminations, and general anxiety about Medicaid changes. News about a major health plan transition can add to that stress, even when coverage is expected to continue. Agencies will play an important role in explaining what is changing and what is not.

Action steps for Minnesota IDD agencies

While the transition will play out over months and years, there are practical steps agencies can take now to stay ahead:

1. Map your exposure. Identify how many individuals you serve who are enrolled in UCare Medicaid, MinnesotaCare, or individual and family plans. Flag those rosters so you can track any communications related to the transition.

2. Tighten eligibility and payer data. Make sure eligibility checks, member IDs, and plan information are accurate in your EHR and billing systems. Cleaner data will make it easier to navigate any plan or product code changes once they are announced.

3. Centralize payer communication. Designate a point person or small team to monitor updates from DHS, MNsure, Medica, and UCare. Keep a shared log of notices, FAQs, and implementation timelines so front line staff, billing teams, and leadership are working from the same information.

4. Proactively communicate with families. Consider a short, plain language update that explains:

   • There is an agreement for Medica to acquire UCare contracts

   • Coverage is expected to continue without interruption

   • The agency will watch for updates and support individuals through any changes in ID cards, plan names, or contacts

5. Use technology to reduce disruption. Agencies with integrated scheduling, documentation, and billing are better positioned to handle payer changes because they can adjust a single system instead of chasing updates across multiple spreadsheets and paper workflows. Wherever possible, move toward centralized, real time information about authorizations, service lines, and plan details.

Minnesota is trying to preserve stability for low income and high needs individuals by moving UCare’s members into a structure that can sustain coverage long term. For IDD providers, the work will be to translate that high level goal into day to day stability for individuals, families, and staff.

Staying organized, watching for official updates, and investing in clean data and connected systems will help agencies move through this transition with less friction and more confidence.