UCare has announced plans to withdraw from non-senior Medicaid coverage in 11 Minnesota counties, including Ramsey, affecting 88,000 members.

The Minneapolis-based health insurance nonprofit said it will not provide Medicaid coverage beginning Sept. 1 in Benton, Chisago, Crow Wing, Pennington, Ramsey, Roseau, Sherburne, Stearns, St. Louis, Wadena and Wright counties. The withdrawal is expected to be temporary, according to the provider.

UCare, which is contracted through the state to administer Medicaid insurance, pays for members’ insurance claims and receives a monthly payment from the state, but the state’s payment rates are not adequate, UCare communications and public relations specialist Wendy Wicks said.

“The payments are not meeting the cost of the claims that we’re receiving,” Wicks said. “So, in essence, we’ve had to scale back our enrollment to be able to serve the members we have.”

In agreement with the Minnesota Department of Human Services, UCare made the decision “to offset further losses in particular counties,” according to the provider. The temporary timeframe is to be determined in partnership with the department, according to UCare.

“UCare has experienced significant losses in Medicaid because of a payment mismatch between the government payments we receive and the rising cost of care among our members,” a press release stated.

UCare started facing financial challenges in 2023, Wicks said, when more enrollees began seeking care that had been deferred during the COVID-19 pandemic.

Elective services like joint replacements increased and prescriptions for expensive, new GLP-1 medications such as Ozempic and Wegovy also increased, while government payment rates were not keeping pace, she said.

“We just need to balance our books,” Wicks said. “That’s what it will take. We have to get to a point of break-even right now.”

Wicks said UCare has been doing everything it can to reduce costs, including laying off some of its employees to reduce administrative costs.

According to UCare, the Department of Human Services began notifying members of the withdrawal last week. Those affected are members enrolled in PMAP (the Prepaid Medical Assistance Program) and MinnesotaCare plans for eligible adults under 65, children and families, according to UCare.

Medicaid plans for seniors and residents with disabilities in the 11 counties will not be impacted by the temporary withdrawal, UCare stated.

“UCare will continue to serve more than 250,000 PMAP and MinnesotaCare members in 44 counties plus the state’s largest county, Hennepin County,” the release stated. “We remain as committed as ever to Minnesota Medicaid and are confident this short-term solution will result in long-term sustainability. We look forward to returning to these counties in the future.”

Each county impacted by the withdrawal has at least two other health plan options, including Blue Cross Blue Shield and Medica, according to UCare.

“UCare will work with DHS and their enrollees’ new health plans to assist with transitions of care as people move to their new health plans,” the Department of Human Services stated.

Minnesota’s HMO continuity of care statute requires health plans to allow people to continue to see their current provider for up to 120 days if they are in the middle of a course of treatment, according to the department.

Enrollees should call their provider to ensure that they are in network with their new health plan, the department stated.