In Minnesota, the second-largest Medicare Advantage health insurer — Minneapolis-based UCare — announced it was exiting the market for 2026.
In recent years, UCare apparently priced its products too low for escalating cost trends and lost big money as a result.
Across the country, Medicare Advantage insurers are seeing federal funding reductions due in part to the government tightening up the extra payments insurers receive for taking on patients with bigger health problems.
Critics say insurers have gamed the system to wrongly drive up revenue through these payments, while insurers insist they’ve done nothing wrong and use the funds to provide benefits for seniors. Medicare responded by making it harder to obtain the payments.
“You’re seeing benefit reductions across the industry and, importantly, you’re seeing a reduction in choice for consumers,” said Bobby Hunter, UnitedHealthcare’s chief executive of government programs, during a call with reporters last month. “Those are byproducts of the cuts that have been made to the program.”
Insurers say their prices and options also have been shaped by changes over the last two years that have made Part D drug coverage more generous for seniors.
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