Fast-growing health insurer UCare moves into new markets while staying true to its roots.By Jackie Crosby and PATRICK KENNEDY • Star Tribune staff writers
CEO Nancy Feldman, who has led UCare for nearly two decades, is guiding the nonprofit health insurer into the MNsure exchange market. A larger UCare is now more able to absorb some of the turbulence in today’s medical insurance marketplace, she said.
CEO Nancy Feldman still slides on the tiara when there’s a milestone to celebrate at UCare, the health insurance company she has run since 1995.
The tradition began not long after Feldman arrived, when she donned the crown and handed out 40,000 M&Ms to employees, with each chocolate morsel representing one of the enrollees in the still-young insurer’s health plans.
But the biggest tiara party could come in the year ahead. UCare expects to see enrollment expand beyond the 400,000 mark, extending an unrivaled growth spurt that sets it apart from its peers among the Star Tribune’s 100 largest nonprofit companies, where it ranks No. 7 on our list.
Much of UCare’s gains have come from winning state contracts as part of a new competitive bidding process launched two years ago. UCare won contracts in all seven counties in the Twin Cities area in 2012, grabbing market share from much larger competitors Blue Cross and Blue Shield of Minnesota (ranked No. 1) and Medica (No. 3).
Next year, UCare will see gains from state contracts in 27 counties outside the metro area, where it often is the sole carrier and low-cost bidder, meaning UCare will become the default insurer for those who don’t make a choice.
And now UCare has made a bold step to enter the commercial market for the first time, and is selling plans to individuals on the new MNsure insurance exchange.
“Even with that growth, they’ve stayed pretty close to their roots, which always emphasized community health,” said independent health care analyst Allan Baumgarten. “To their credit, that’s still very much their focus.”
UCare’s growth comes at a time when the insurance industry is under unprecedented pressure to change. The Affordable Care Act no longer allows them to deny coverage based on pre-existing conditions even as the state and federal governments cut reimbursements to doctors and hospitals.
But UCare considers itself well-suited to the new world. It was formed 25 years ago by family doctors at the University of Minnesota as way to provide stable insurance coverage for their poorest patients. The company’s leaders say they were players in coordinating care efforts long before it became a centerpiece concept of health reform efforts.
Until this year, UCare’s sole business had been focused on government-subsidized programs, including Medical Assistance and MinnesotaCare. UCare has the largest Hmong and Somali population of any Minnesota health plan, and it serves more people with disabilities and those enrolled in Medical Assistance.
The explosive growth has boosted UCare’s workforce to more than 600 employees, whose offices are stretched across three buildings around its longtime base in northeast Minneapolis.
“I used to say that we were the little tugboat … vs. the big ocean liners,” Feldman said in an interview. “That made us more flexible. But something didn’t occur to me — waves.”
Having been tossed about by waves during its formative years, a larger UCare is now more able to absorb some of the turbulence in today’s medical insurance marketplace, Feldman said.
Part of that came after UCare voluntarily returned $30 million in excess reserves to the state in 2011. The unprompted move ended up bringing greater scrutiny on itself — and on other health insurers — and the way in which the Department of Human Service had traditionally doled out more than $3 billion in contracts.
“That’s the ‘No good deed goes unpunished,’ ” Baumgarten said. “Legislators didn’t blame UCare, they blamed DHS for mishandling it.”
More recently, Feldman has been focused on putting systems and infrastructure in place to handle an estimated 100,000 new customers next year, ever mindful that the marketplace remains volatile in the age of Obamacare.
“What the state giveth, the state can take away,” Feldman said. “And the exchanges are kind of a crapshoot for everybody.”
But the organization and its board have always “taken the long view,” she continued. “We have a unique role in the market of bringing health care to those who have challenges getting it, and we have always stayed focused on that mission.”