- Associated Press - Friday, October 9, 2015

ST. PAUL, Minn. (AP) - A Minnesota health insurance company said Friday that it will drop its lawsuit against the state for not renewing its contracts to cover hundreds of thousands of low-income residents.

UCare sued state officials this summer after losing a competitive bid for contracts to cover residents on MinnesotaCare and Medical Assistance, arguing that the Department of Human Services arbitrarily cut it out. A Ramsey County District judge denied the company’s request to halt registration for those public programs as the case progressed but promised to give UCare a venue to make its case for why it should be restored. The case was scheduled for a Nov. 2 hearing.

UCare said in a statement Friday that it plans to ask the court to dismiss the case next week, citing the work ahead for the state to transition most of its 370,000 enrollees into new plans for next year.

“Now that open enrollment has begun for many Minnesota counties and the county appeals have concluded, we have decided to withdraw from litigation in the interests of allowing MinnesotaCare and PMAP enrollees to go forward with their 2016 health plan selections without further delays or confusion,” the company said.

The decision comes after state officials restored UCare’s contract to cover residents in Olmsted County, one of many counties that appealed the state’s decision not to award the Minneapolis company a contract. UCare said it will still lose about 350,000 customers and has warned that it may slash half of its business with the loss of the contracts.

Department of Human Services Commissioner Lucinda Jesson welcomed UCare’s decision and again defended the state’s competitive bidding process as a sound and financially prudent process that will save the state $450 million.

“We appreciate that UCare recognized it’s time to move forward,” she said in a statement.

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