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Health insurer with 370K customers sues state for being dropped from public programs

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UCare is suing the state of Minnesota after being dropped from the state's public health insurance programs.

According to the Pioneer Press, UCare – which has about 370,000 current customers that would have to shift to a new provider – argues the state's competitive bidding process for Medical Assistance and MinnesotaCare was illegal.

The company was dropped as an option from those programs after a competitive bidding process – a move that Department of Human Services Commissioner Lucinda Jesson has said would save $450 million starting next year, MPR reports.

Blue Cross, HealthPartners and Medica got the winning contracts.

UCare, however, says the bidding violated state statutes, and in Ramsey County District Court filed the lawsuit requesting the scheduled Sept. 1 enrollment date for the two public health insurance programs be delayed, the Business Journal reports.

The full memo, posted by the Business Journal, argues UCare's forced departure also "flew in the face of the recommendations from at least 47 county boards" that wanted the insurer to continue managing the public plans for them.

Lawmakers who heard from UCare earlier this week were described by the Star Tribune as "sympathetic." But there is a hitch – the Department of Human Services says legally, it can't release the bidding documents until things are finalized and contracts are signed this fall.

Which means a lot of the information people want to know – for example, what caused UCare to not be selected – are unanswerable right now, the paper explains.

Jesson, according to the Pioneer Press, said 45 percent of the bid comprised cost, while care quality made up the rest.

In 2013, UCare was the second-largest health insurer in the state based on premiums, the Business Journal found.

It was also the first company to offer coverage through MNsure, the UCare website says.

MinnesotaCare and Medical Assistance

MinnesotaCare and Medical Assistance help provide health insurance for thousands of lower-income Minnesotans.

For MinnesotaCare, the income limit for eligibility is 133 percent to 200 percent of the federal poverty guidelines – that’s a family of one making about $15,000-$23,000 a year.

It's funded by a state tax on Minnesota hospitals and health care providers, federal Medicaid funds and enrollee premiums, according to the Department of Human Services.

Those making less are eligible for the separate Medical Assistance program, which is the largest of Minnesota's publicly funded health program with about 700,000 enrolled, the department says. State and federal funds help pay for it.

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