NEWS RELEASE
June 4, 2026 Contact: Allan Baumgarten, 952/212-8589
Minnesota Health Market Review 2026 finds:
Second Year of Large Losses for Health Plans;
Demise of UCare Lead to Major Changes
In Medicare Advantage Enrollment
(Minneapolis-St. Paul) Minnesota health plans suffered large losses for the second consecutive year in 2025. UCare Minnesota, once the largest HMO in the state, collapsed after three years of large losses, and its Medicare Advantage membership moved to Blue Cross Blue Shield and other health plans. Minnesota’s high percentage of insurance coverage has dropped and is likely to drop even further.
These findings and others are in Part One of Minnesota Health Market Review 2026, released today by Minneapolis-based analyst Allan Baumgarten. This is the 37th edition of the report, which he first published in 1990. His market studies for Minnesota and other states analyze key trends and competitive strategies for health plan companies and hospital systems. Part Two of the Minnesota report, to be released later this year, will examine the strategies of the state’s hospital systems, as well their financial results and measures of inpatient utilization, using Medicare cost report data from 2025.
The new report finds that:
- After posting record losses in 2024, Minnesota health plans again reported large losses in 2025. HMOs lost $466.7 million in 2025, or 2.8% of revenues, after losing $789.5 million in 2024. They lost $723.8 million on operations, only partly offset by $257.3 million in investment income. UCare Minnesota lost $410.9 million in 2025, or 5.9% of revenues, after losing $480.7 million in 2024 and $102.5 million in 2023. State regulators placed UCare in rehabilitation, and some of its assets, including its state Medicaid contracts and individual health plans were assumed by Medica Health Plans. Medica’s HMO reported a small profit in 2025, but its Medica Insurance Company reported losses of $83.3 million, mostly from its individual and small group plans.
- Many of UCare’s 176,000 Medicare Advantage enrollees signed up for Blue Cross Blue Shield plans for 2026. UCare ended its Medicare Advantage plans at the end of 2025, and UnitedHealthcare dropped its plan in 45 counties here and saw its enrollment drop by 16,450. Humana Insurance lost 15,800 Medicare lives. Blue Cross Blue Shield added 93,000 Medicare lives, while Medica Health Plans gained 62,700 in its HMO and Medicare Cost plans, and HealthPartners added 9,500 lives. About 17,000 seniors reverted to traditional Medicare for the 2026 benefit year.
- While Blue Cross Blue Shield added a large number of seniors, it lost about $365 million on its Medicare Advantage plans in 2025. Minnesota HMO and other insurers lost more than $740 million on their Medicare Advantage health plans. The biggest losers were UCare, which lost $263.4 million in 2025 and Blue Cross Blue Shield, which lost $365 million. Health plans reduced their losses on Medicaid and other state program plans, from $639.7 million in 2024 to $241.3 million in 2025.
- The percentage of Minnesotans without health insurance increased from 4.0% in 2023 to 5.3% in 2024. In 2024, about 260,000 lost their Medicaid coverage during the “Great Unwinding.” Another 140,000 Minnesotans are likely to lose Medicaid benefits over the next 10 years due to cuts enacted in 2025. The number of people buying individual coverage on the MNsure exchange decreased in the last open enrollment period as premiums grew sharply and the enhanced subsidies expired. Enrollment is expected to decline further as individuals realize they cannot afford the increased premiums.
Excerpts from the report, including the “Minnesota Health Plans at a Glance” page can be viewed at AllanBaumgarten.com. Subscriptions to Minnesota Health Market Review 2026 in interactive PDF format, including both Parts One and Two, can be ordered and downloaded for $160.00 at www.AllanBaumgarten.com. Phone: 952/212-8589. E-mail address: Baumg010@gmail.com
In 2025 and 2026, Allan Baumgarten has published reports analyzing health care payer and provider markets in Minnesota, Colorado, Florida and Texas. He conducts project research for a variety of clients and has completed four studies of health plan and provider system strategies for the Robert Wood Johnson Foundation. More information about those projects is available at his website, www.AllanBaumgarten.com
Monday, October 20, 2025
Minnesota Health Market Review 2025, Part Two finds:
Key Minnesota HMOs Continue Large Losses in 2025, Burn Through Capital
Enrollment in Medicare Advantage and Individual Plans Will Likely Drop This Fall
Twin Cities Hospitals Increase Profits by 357% in 2024
All Minnesota HMOs lost money in the first half of 2025, and the three largest– Blue Plus, HealthPartners and UCare Minnesota—lost a combined total of $343 million. We predict that enrollment in individual and Medicare Advantage health plans will drop sharply in this fall’s open enrollment. Twin Cities hospitals improved their profits by 357% in 2024, with average margins of 4.7%
Using data from health plan statements for the second quarter of 2025 and Medicare facility cost reports for hospitals for 2024, Part Two of Minnesota Managed Care Review 2025 analyzes hospital financial results and utilization measures, and updates changes in health plan enrollment and profitability. The hospital analysis compares data for 32 hospitals in the Twin Cities area, including four in western Wisconsin, and more than 50 hospitals serving communities in Greater Minnesota, including the Mayo and Gundersen hospitals in La Crosse, WI and the Sanford and Essentia hospitals in Fargo and Sioux Falls. One set of tables compares financial and utilization data for hospitals and the major health systems in the Twin Cities: Fairview, Allina and HealthPartners. A second set of tables presents data for the dominant regional systems serving communities in Greater Minnesota: Mayo Clinic, Essentia, CentraCare and Sanford Health
Key findings in the new report:
- After posting losses of $789.5 million in 2025, Minnesota HMOs reported losses of $367.8 million in the first six months of 2025. HealthPartners lost $166.9 million, UCare Minnesota lost $125.4 million and Blue Plus lost $50.6 million. UCare’s capital fell by half a billion dollars in 2024, or almost half, and has fallen by an additional $147.4 million in 2025. Hennepin Health’s HMO lost $9 million so far in 2025, meaning that it has burned through more than two-thirds of its capital in the past 18 months.
- Twin Cities area hospitals improved their combined net income by 357% in 2024, from $147.7 million in 2023 to $674.1 million, or 4.7% of net patient revenues. They lost $561 million on patient care operations, which was more than offset by $1.285 billion in other revenues from investments, government grants and philanthropy. For the sixth straight year, the HealthPartners hospitals had the best results, with net income of $270.5 million, or 11.3% of revenues. Children’s Health Minnesota’s hospitals had a margin of 8.4% while the MHealth Fairview hospitals had net income of $204.9 million, or 4.8% of net patient revenues. The Allina Health hospitals reduced their combined loss from $179.4 million in 2023 to $15.4 million in 2024.
- In 2024, hospitals serving communities outside the Twin Cities region posted net income of $1.99 billion, or 11.4% of their net patient revenues. (In this summary, we excluded data from one large hospital where we believe the Medicare cost report data is incorrect.) Mayo Clinic, the largest health system in the state, reported net income at its Minnesota and La Crosse hospitals of $1.251 billion, or 22.8% of net patient revenues, almost the same as in 2023. CentraCare had the second highest margin, with net income of $163.2 million or 10.7% of net patient revenues. Sanford Health’s hospitals in western Minnesota and Sioux Falls and Fargo had net income of $266.4 million, down from $342.5 million in 2023.
- Following heavy losses, UCare Minnesota will end its Medicare Advantage contracts at the end of 2025 and HealthPartners has already exited state programs for persons with disabilities. Other Medicare Advantage plans will leave some rural counties or have lost key health systems from their provider networks. We think that a large number of Medicare Advantage plan enrollees will revert to traditional Medicare in this open enrollment period, which happened in 2018, when Medicare Cost plans ended. And we think that many of more than 200,000 Minnesotans in individual plans sold on the MNsure marketplace will drop their coverage after seeing the large premium increases posted for 2026.
Next year will be the 37th year that we publish Minnesota Health Market Review. Part One of the 2026 edition is scheduled for release next May. The Part One report will examine the competitive strategies of Minnesota health plans in the context of 2025 data on their enrollment trends and financial results Excerpts from the market reports and subscription information can be found at www.AllanBaumgarten.com
Exhibit 1: Minnesota Health Plans at a Glance, 2025
Click here: https://allanbaumgarten.com/wp-content/uploads/2026/06/Revised-Exhibit1MN2026.pdf
2025 data set for Minnesota
Click here to download
Minnesota Part One
| Introduction | | 3 |
| Market Structure | | 4 |
| Health Plan Companies | | 4 |
| Network Arrangements and Provider Systems | | 8 |
| Trend Analysis | | 8 |
| Health Plan Enrollment | | 8 |
| Individual Markets and MNsure | | 10 |
| State Health Care Programs | | 11 |
| Medicare Health Plans | | 13 |
| Health Plan Profitability | | 13 |
| Financial Results by Line of Business | | 15 |
| Health Plan Capital | | 24 |
| A Look Ahead | | 25 |
Minnesota Part Two
| Introduction | | 5 |
| Minnesota Hospitals and Health Systems | | 6 |
| Competitive Strategies |
| 6 |
| Twin Cities Area Hospitals and Systems | | 9 |
| Revenues and Net Income | | 9 |
| Inpatient Occupancy and Payer Mix | | 13 |
| Performance Bonuses and Penalties | | 15 |
| Greater Minnesota Systems and Hospitals | | 15 |
| Revenues and Net Income | | 16 |
| Occupancy and Payer Mix | | 19 |
| Performance Bonuses and Penalties | | 20 |
| Health Plan Trends | | 22 |
| A Look Ahead | | 25 |
- Christopher Snowbeck wrote in the Minneapolis StarTribune: "Health Insurers Return to Profitability in Minnesota" Click here to view
- Paul Demko wrote in Politico: "Massive financial improvement for Minnesota health plans last year." Click here to view.
- Chistopher Snowbeck wrote in the Minneapolis StarTribune: "Health plans lost less on Medicaid last year." Click here to view
- Christopher Snowbeck wrote in the Minneapolis StarTribune: "Study: Big hospitals outside Twin Cities grow profits."
- David Montgomery wrote about the 2015 report in the St. Paul Pioneer Press: "Metro hospital profits fell in 2014, while outstate earnings rose"
- Dan Diamond wrote about the 2015 report in Poiltico Pulse: "The Mayo Clinic had a nearly 18 percent profit margin"
- Christopher Snowbeck wrote in the Minneapolis StarTribune: "Operating Losses Swamp Investment Gains at Health Plans in Minnesota" Click here to view
- Christopher Snowbeck wrote in the Minneapolis StarTribune: "Study: Big hospitals outside Twin Cities grow profits."
- David Montgomery wrote about the 2015 report in the St. Paul Pioneer Press: "Metro hospital profits fell in 2014, while outstate earnings rose"
- Dan Diamond wrote about the 2015 report in Poiltico Pulse: "The Mayo Clinic had a nearly 18 percent profit margin"
Minnesota Health Market Review 2016, Part One, released May 25: "HMO Profits for Public Programs Surpass $230 Million; Medicaid Enrollment Grows But Individual Market Remains Volatile; Hospitals Double Down on Health Plan Strategy"
- Christopher Snowbeck wrote in the Minneapolis StarTribune: "Record HMO profits from state programs." Click here to view