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Minnesota Health Market Review 2022

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  • July 2022
  • Region: United States
  • Allan Baumgarten
  • ID: 5626437

Minnesota health plans add enrollees, increase profits despite higher medical costs

National health insurers are grabbing more market share in Minnesota, and some Minnesota companies are expanding outside the state. HMOs increased their enrollment by 8.5% in 2021, adding Medicaid and Medicare beneficiaries and, despite higher medical expenses, they generally maintained their strong profitability from 2020, the first year of the COVID-19 pandemic.

These and other findings are reported in Part One of Minnesota Health Market Review 2022. First published in 1990, this is the 33rd edition of the report, which analyzes key trends and competitive strategies for health plan companies and hospital systems in Minnesota’s health care markets. In Part Two of the report, to be released later this year, we present our analysis of the state’s provider systems and their strategies, with 2021 data on their financial performance and measures of inpatient utilization. The new report finds that:

  • Measured by insurance premium revenues, UnitedHealthcare and Humana have grown their share of the health insurance market in Minnesota from 3.7% in 2017 to 9.1% in 2021. UnitedHealthcare bought the PreferredOne health plans from Fairview Health in 2021. Under its new Medicaid managed care contract, UnitedHealthcare will add several hundred million in new revenues in 2022.
  • At the same time, Minnesota health plan companies are expanding into other states. Medica acquired a controlling share of SSM Health Plans, including Dean Health Plan, one of the largest insurers in south central Wisconsin. UCare is bidding on Medicaid managed care contracts in Iowa.
  • HMOs and County-Based Purchasing plans reported net income of $279 million, or 2% of underwriting income of $13.757 billion. Combined net income was a little higher than in 2020, when the average profit margin was 2.3%. Of the HMOs, Blue Plus had the highest net income, $111,1 million, while Medica Health Plans had the highest margin, at 7.7%. Medica Insurance Company, based on operations in Minnesota and eight other states, had net income of $510 million or 17% of revenues.
  • Public programs were the most profitable line of business for Minnesota health plans. HMOs had underwriting income of $240.9 million on programs including Medicaid, MinnesotaCare and Minnesota Senior Health Options (MSHO, for persons dually eligible for Medicare and Medicaid). They made $101.6 million on Medicaid and $103.7 million on Minnesota Senior Health Option. In fact, HMOs and County-Based Purchasing plans had combined underwriting income on their MSHO plans of $361.1 million in the past four years.
  • Enrollment in Medicaid HMOs increased by 107,000 lives or 9.8% in 2021 and continued to increase in the first quarter of 2022. Overall HMO enrollment grew by 8.5% in 2020, with UCare, the largest Medicaid HMO, adding about 67,000 lives, and Blue Plus growing by 41,300 members. Medicaid managed care enrollment grew to 1.15 million in June 2022, although it is expected to drop once the COVID-19 public health emergency ends. Minnesota will then face a large backlog of recipients who will need to reverify their eligibility for Medicaid benefits.
  • Enrollment in Medicare Advantage HMO and PPO plans grew by 39,000 in 2022, or 7.2%. About 48.4% of Medicare beneficiaries in the state are in Medicare health plans, above the national average of 44.4%. UCare has the largest HMO plans in the state, and Blue Cross Blue Shield has the largest PPO plans.
  • Some Minnesota companies have moved capital from their local plans to make investments in other states. In the past two years, Medica Insurance Company paid dividends totaling $575 million to its parent company, some of which was likely used to buy a 55% share in the SSM health plans. Blue Cross Blue Shield of Minnesota paid dividends of $180 million in 2020 and 2021 to its parent, making that money available for other investments.

Please Note: Price Includes a subscription to parts one and two of the report. 

Table of Contents


Market Structure
  • Health Plan Companies
  • Network Arrangements and Provider Systems
Trend Review
  • Health Plan Enrollment
  • Individual Markets and MNsure
  • State Healthcare Programs
  • Medicare Health Plans
  • Health Plan Net Income.
  • Financial Results by Line of Business
  • Administrative Expenses
  • Health Plan Capital
A Look Ahead


The reports analyzing state health care markets are intended to be a resource to health care organizations facing a full range of challenges but also seeking to identify and benefit from opportunities that present themselves. 

This report is presented in three main sections. The first part, Market Structure, describes the major health insurers and hospital systems in the state, showing recent entrants and the high-level of consolidation that has occurred in both the health plan and provider markets. Market Trends, the next section, presents our analysis of enrollment trends and financial results for the health insurers. The last section contains our analysis of financial and inpatient utilization data on the hospitals in the state.

The analysis of health plan companies is based on their annual and quarterly statements filed with the Department of Insurance, including forms prescribed by the National Association of Insurance Commissioners and supplemental reports required by the state. The publisher also uses Medicaid data from the Department of State Health Services and Medicare health plan and hospital data from the Centers for Medicare and Medicaid Services. The publisher has that data together with insights that they have gained in interviews with dozens of leaders in health care organizations in the state.