Minneapolis-based UCare was not on the list of winners announced Wednesday by Iowa health care officials, instead selecting two for-profit companies bidding to manage care for Medicaid beneficiaries.
UCare had been looking for a way to expand beyond current health plan operations in Minnesota and Wisconsin and saw this as an opportunity to do so. In March, UCare officials told the Star Tribune they hoped to win the contract, in part by stressing the health plan's nonprofit status.
The Iowa Department of Human Services said Wednesday that it intends to award the large contracts to subsidiaries of Indiana-based Elevance Health (formerly called Anthem) and California-based Molina Healthcare.
"UCare is disappointed not to be included in the current list of Iowa Medicaid finalists and we will continue to evaluate our opportunities for growth," the HMO told the Star Tribune in a statement.
Iowa officials must still finalize contracts with the winners named Wednesday. Losing bidders can ask the department to reconsider the decision.
Medicaid is jointly funded by states and the federal government to provide health insurance primarily for lower-income people under the age of 65.
UCare has been a large Medicaid HMO in Minnesota for most of its history. The company also sells Medicare Advantage coverage and health plans for individuals who buy through the government-run MNsure health exchange.
UCare employs about 1,200 people, an increase of about 50% compared with 2017. In 2021, the insurer moved up to the No. 5 ranking in terms of revenue among the state's largest nonprofit groups, according to an annual survey by the Star Tribune.
In recent years, UCare has seen significant growth in Medicaid enrollees. That's been true in part because government eligibility re-determinations that could drop people from Medicaid benefits have been suspended during the COVID-19 pandemic.
Beyond the Medicaid market in Iowa, UCare officials said earlier this year the HMO might also consider competing in Iowa's markets for Medicare Advantage coverage as well as health plans for individuals.