Minnesota Health Market Review 2025: HMO Profitability Plunges Amidst Enrollment Downturn

Strategic Insights -

A recent report by Research and Markets highlights a significant decline in profitability for HMOs and County-Based Purchasing plans in Minnesota, as well as a substantial drop in Medicaid managed care plan enrollees. Despite growth in Medicare Advantage plans, health insurance enrollment is expected to decline sharply if the proposed budget bill is enacted. The report, part of a series examining health markets in Minnesota and five other states, sheds light on key trends and competitive strategies for health plan companies and hospital systems.

Key Takeaways:

  • Total enrollment in HMOs and County-Based Purchasing plans dropped by 168,000 (9.7%) in 2024, with a $1 billion reduction in premium revenues.
  • UCare reported the largest underwriting losses at $606.5 million, followed by HealthPartners ($170.9 million) and Medica Health Plans ($154.3 million).
  • Medicaid plans have posted underwriting income of $939.5 million in the last 10 years, but HMOs and county plans lost $640.4 million on Medicaid plans in 2024.
  • Enrollment in Medicare Advantage plans has grown steadily since 2016 but has not been profitable in Minnesota since 2022.
  • Health plans have reported improved results in the first three months of 2025, except for UCare, which still lost $25.5 million in Medicare Advantage plans.
  • 96% of Minnesotans have health insurance, but projected cuts to Medicaid and changes to subsidies on the MNsure exchange may result in thousands losing coverage.

Statistics:

  • Total enrollment in HMOs and County-Based Purchasing plans dropped by 168,000 (9.7%) in 2024.
  • Premium revenues for HMOs dropped by more than $1 billion (6.5%), while medical costs increased, resulting in combined underwriting losses of $1.067 billion.
  • Medicaid plans have posted underwriting income of $939.5 million in the last 10 years.
  • Enrollment in Medicare Advantage plans grew by 8.7% in 2024, but the plans have not been profitable in Minnesota since 2022.
  • UCare spent $47 million from its reserve for future revenue shortfalls in the first quarter of 2025.

Sources:

  • Research and Markets (2025) - "Minnesota Health Market Review 2025 (Part 1)" report
  • UCare
  • HealthPartners
  • Medica Health Plans
  • Hennepin Health