Medica slashes jobs as it quits most Medicaid business

Health insurer Medica is cutting about 110 jobs and not filling about 140 more vacant positions because of its decision to get out of Minnesota's Medicaid program serving children and families, the company announced Thursday.

Late last year, Medica said it would no longer manage the care for more than 300,000 MinnesotaCare and other Medicaid customers effective May 1. The company said it lost almost $200 million on Medicaid programs for children and families in 2016.

The insurer says the decision to leave the market will affect a total of about 350 jobs. In addition to cuts announced Thursday, Medica said it cut about 100 jobs in January.

Medica sued Minnesota's Department of Human Services last month, accusing the state of giving preferential treatment to competitors in contracts for state-sponsored health care.

Among other things, Medica said DHS secretly increased the rates paid to other managed care organizations, and allowed them to re-negotiate contract terms with the state.

DHS refused Medica's request to renegotiate payments. State officials deny Medica's allegations.

Although Medica is exiting of most of its Medicaid business, the company will continue to provide health coverage to disabled and elderly Minnesotans on Medicaid. Medica says it will shift administration of those programs to its Medicare operation.