Bloomington-based HealthPartners said it will start selling Medicare health plans next year in North Dakota and South Dakota in conjunction with Sanford Health, a large operator of hospitals and clinics in the region.

Currently, a relatively small share of those with Medicare coverage in the Dakotas receive their benefits through private health plans, which is an increasingly popular option across the country. So, leaders of the two health care organizations said they plan on growing that portion of the Medicare market.

The westward move represents the second Medicare expansion in as many years for HealthPartners, although the health plan has seen only modest growth thus far from policies it started selling this year in parts of Illinois and Iowa.

"When you move into a new marketplace, sometimes it takes a while for seniors to become familiar with what your offering is," said Andrea Walsh, the chief executive at HealthPartners. "So, while it gets a slow start, we believe, ultimately, seniors in North and South Dakota are going to find ... it'll be an attractive product."

Medicare beneficiaries can get coverage through the traditional government program, which often is paired with a "Medigap" supplemental insurance policy, or through health plans where private insurers manage care.

In 2017, one in three Medicare beneficiaries, or about 19 million people, are enrolled in a Medicare health plan, according to the California-based Kaiser Family Foundation. The rate is higher in Minnesota (56 percent) but lower in North Dakota (17 percent) and South Dakota (20 percent).

Among Medicare health plans in the Dakotas, Minnetonka-based Medica is currently the dominant carrier with more than three-quarters of the market in both states, according to researchers at the Kaiser foundation.

Currently, Kentucky-based Humana is the second largest Medicare health plan in North and South Dakota; the company said it will offer new plans and benefits in those states for 2018.

Open enrollment for Medicare health plans begins Oct. 15 and stretches through Dec. 7. Coverage starts Jan. 1.

HealthPartners is one of the largest health insurers in Minnesota, where it also operates a growing network of hospitals and clinics. The nonprofit health system includes Regions Hospital in St. Paul and Methodist Hospital in St. Louis Park.

Sioux Falls, S.D.-based Sanford Health operates 45 hospitals and nearly 300 clinics in nine states and four countries, the health system says. Also a nonprofit, Sanford has an insurance division that sells Medigap plans, but it will help promote the new health plan products, as well.

Kelby Krabbenhoft, the chief executive at Sanford Health, said his company tried selling Medicare health plans a long time ago and "learned a good lesson."

"If you don't have the infrastructure and the entirety of what HealthPartners has in terms of serving that specific product in that market, you can take on more risk than you need to," Krabbenholft said. "That's why the partnership was the most desirable way to go."

HealthPartners and Sanford Health did not release financial terms of the arrangement.

In Iowa and Illinois, HealthPartners and a Des Moines-based health system jointly invested $7 million last year to launch their new insurance company for Medicare business. In a second-quarter regulatory filing, the insurer named HealthPartners and Unity Point Health said it was providing Medicare coverage to about 300 people.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck