Medica agreed to acquire selected contracts and assets from UCare, another Minnesota-based nonprofit health plan. Both organisations said the deal arrives after UCare’s earlier decision to exit Medicare
Advantage and scale back its Medicaid footprint in 2026, a move forced by mounting financial strain.
The acquisition is expected to close in the first quarter of 2026 once regulators sign off. Lisa Erickson, Medica’s CEO, said the deal builds on Medica’s strengths while carrying forward UCare’s legacy.
According to Beinsure analysts, the timing hints at a controlled transition rather than a distressed handover.
UCare will continue covering people enrolled in a 2025 plan. Eligible members next year can choose either Medica or UCare products.
The companies said the transaction ultimately expands access for more than 300,000 UCare members across Minnesota and parts of western Wisconsin. It’s a sizeable shift in a regional market already under tension from rising medical and pharmacy costs.
“As a nonprofit, community-focused health plan, Medica has a long history of serving members in Minnesota, guided by our mission and trusted relationships with providers, customers and members,” said Lisa Erickson, CEO of Medica.
Now we have the opportunity to build upon both Medica’s strengths and UCare’s legacy, allowing Minnesotans to continue to have a health care experience that ensures they feel cared for.
UCare explained on its website that its exit from Medicare Advantage and its Medicaid pullback stem from unsustainable financial pressures.
With almost its entire book tied to government programs and no commercial business to buffer losses, the math stopped working. Maybe this has been coming for a while, just quietly.
Medica offers employer, individual, Medicaid and Medicare coverage across nine states and has more than 1.4 mn members.
The insurer has been navigating the same environment everyone else faces: rising utilisation, climbing medical costs and regulatory adjustments that ripple through individual and small group markets.
Regulators in multiple states recently confirmed insurers are seeking double-digit rate increases in those segments, a sign that the cost pressures aren’t fading anytime soon.
Under the terms of the agreement, subject to customary conditions to closing including the receipt of required regulatory approvals, individuals enrolled in UCare’s 2026 Medicaid and Individual and Family Plans will continue to receive services without interruption.
Medica and UCare are committed to providing a seamless experience for members and will work with the appropriate state agencies and the Attorney General’s Office to file the needed documentation.
The announcement follows UCare’s decision earlier this year to terminate its Medicare Advantage contracts.
In alignment with its Board of Directors, UCare began exploring opportunities to transition its members to a community-focused, nonprofit organization with aligned missions.
“Combined, UCare and Medica have nearly a century of industry expertise and a shared commitment to community-driven coverage for those who need it most,” said Hilary Marden-Resnik, President and CEO of UCare. “This is a significant agreement that will enable us to preserve access to coverage for Minnesota’s most vulnerable members.”
Erickson will continue as Medica’s President and CEO.
“Hilary’s partnership and support as we prepare for this transition demonstrates her commitment to UCare, their members and the community,” continued Erickson. Throughout the coming weeks and months, continuity of care will be our greatest focus, as we ensure that UCare members feel cared for and confident in their ability to receive the care they need.”
