Minnetonka-based Medica has laid off 162 workers, saying the reduction in force will align its resources with business priorities.
Minnetonka-based Medica lays off 162 workers
The health insurer’s move is to “align our resources with business priorities.”
The Minnesota Star Tribune
February 2, 2024 at 9:22PM
The move comes at a time when health plans are confronting higher health care costs, although Medica and and other nonprofit health plan companies in Minnesota saw a three-year string of annual profits between 2020 and 2022.
Annual profits at Medica, however, were getting smaller. Regulatory filings suggest key company divisions, while still profitable, were somewhat less so through last year’s third quarter.
In November, Medica was employing about 3,000 people. Workers losing jobs are receiving severance payments, outplacement services and other benefits.
“We made the difficult decision to reduce our workforce to align our resources with business priorities,” the health insurer said in a statement. “Our commitment to high-quality, affordable health care for our members includes how we staff our health plan to best deliver on this commitment.”
Medica is Minnesota’s sixth-largest nonprofit group with 2022 revenue of about $6 billion.
Medica sells coverage to employers and Medicare beneficiaries, as well as people who buy on individual market health exchanges in several states. Medica also has a contract to manage care for patients in Minnesota’s Medicaid and related public programs, although the insurer’s share of this market — which generated record profits in 2022 — is smaller than other nonprofit carriers.
Medica dates back to the mid 1970s, when doctors in the Twin Cities created an HMO called Physicians Health Plan. This insurer merged with another health plan in 1991 to create Medica.
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