Medica 2020 Annual Report

Our 2020 annual report, The Power of Community, highlights the accomplishments and impact of Medica and the Medica Foundation in communities across the heartland of America.


The power of community

In a year of crisis, we leaned on our values and relationships to protect our members and provide support to the diverse communities we serve.


The power of community

The community has trusted Medica for more than 45 years to protect their most precious gift — their health. We take this responsibility seriously. Our commitment to support the health and well-being of our members, customers, providers, and community partners was stronger than ever in 2020. It was a year of grief and sadness, as many people lost loved ones to COVID-19 and many more were isolated from family, friends, and other sources of support. There was anxiety and fear as the pandemic attacked our health, undermined our sense of security, shuttered businesses, disrupted livelihoods, and triggered a wave of hunger. It was also a year of mourning and pain, as we witnessed the senseless death of George Floyd and the unrest that followed. We saw the effects of injustice on people in crisis, and we heard the chorus of voices calling for a more equitable, inclusive society. Throughout this year of profound crisis, my Medica colleagues and I leaned on our values and relationships to protect your health and respond to critical needs in the communities we serve. You can count on us to continue to find ways to do so through 2021 and beyond. On behalf of our entire team, thank you for your support, your partnership, and the trust you place in Medica.

John Naylor President & CEO

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Medica at a glance

We're a nonprofit health plan with a 45-year history of providing affordable access to high-quality health care to our customers and members, and advancing health for everyone in the communities we serve.


V I S I ON To be trusted in the community for our unwavering commitment to high-quality, affordable health care.


To be the trusted health plan of choice for customers, members, partners, and our employees.

Customer focus Excellence Stewardship

Integrity Diversity

We’ve got you covered

Nearly 1 million people trusted us to safeguard their health through a global health crisis.

594,000 Employer-Based


Medicare + Medicaid


Individual + Family

2 0 2 0 MEMB E R S BY COV E R AG E T Y P E

We’re your neighbor

We offer health insurance plans in nine states across America’s heartland. Our local office teams help us stay connected with the communities we serve:


Minnetonka (Headquarters), Duluth, St. Cloud, St. Paul (Opening July 2021)





In 2020, we introduced new options for 2021 coverage to groups and individuals in five states. We offer more plans in more places

Plans for employer groups 3 new counties in Iowa 93 new counties in Nebraska

Plans for Medicare beneficiaries 4 new counties in Iowa 15 new counties in Kansas 18 new counties in Minnesota 3 new counties in Nebraska

Plans for people living with disabilities 3 new counties in Minnesota

Plans for individuals + families 33 new counties in Missouri


Calling with care

When your health is threatened, you need your health plan to be more than just a card in your wallet.

The COVID-19 pandemic presented an immediate threat to our members, customers, providers, business partners, and nonprofit organizations that provide vital services in our communities. Our stakeholders were counting on us, and we couldn’t let them down. Our priority was to support our most vulnerable members. Within two weeks of the national emergency declaration on March 13, our nurses began calling members over age 80 with three or more risk factors for COVID-19. We asked how they were and what they needed, and we connected those with needs to resources such as mail-order prescription delivery, transportation, mental health care, and community services.

The calls were often emotional. One member told our case manager she was the first person he’d spoken to in weeks. Many others told us they were grateful their health plan truly cared about them. Expanding our reach With our operational model in place, we rapidly expanded the calling program. In total, we reached out to 141,000 at-risk members across nine states, including those who worked in essential settings like nursing homes and meatpacking plants. We also worked with our health care system partners, like Waconia, Minn.-based Ridgeview, to reach thousands more of our shared members. We identified at-risk enrollees in our accountable care organization (ACO) plans and equipped our provider partners with a needs assessment tool and community-specific resource lists. Erica Schuler, RN, Ridgeview’s director of ACO and value-based care, called dozens of patients. “As we rapidly adjusted our hospital and clinic operations for the pandemic, we just didn’t have extra IT resources to identify patients for outreach,” she says.

“It’s good to know someone out there really cares about us.”

Medica member who received a COVID-19 outreach call

Thanks for the well-being call and check-in from @Medica4Me. Nice to know they are looking out for folks. #FlattenTheCurve

“Medica gave us a turnkey program and the patient data we needed less than a month into the pandemic. That helped us focus on human interaction, one person at a time. It was meaningful for me to connect with our patients when they really needed to hear from us.” Adapting to new emergencies We soon had another reason to reach out to members in crisis. In the weeks after George Floyd’s death, we called 14,000 members in Twin Cities neighborhoods affected by social unrest. We helped those whose pharmacies were damaged to get medications by other means; arranged rides to care providers when public transportation was disrupted; and referred many to food shelves, mental health providers, and nurse-line services. Later in the summer, we called thousands more members in Iowa to check on their well-being and offer resources after a rare derecho flattened crops and damaged buildings.


COVID-19 response

We met the moment by serving our members, customers, and communities in unprecedented ways.


We expanded coverage of telehealth services so our members could get care by connecting with a provider from a computer or mobile device. We also reimbursed providers for telehealth care at the same rates as in-person care.


We gave 200,000 disposable masks to 20,000 Medica members at high risk for COVID-19. We also donated more than 470,000 masks to nearly 300 community organizations that provide essential services, including federally qualified health centers, medical transportation companies, senior living communities, disability service providers, and dental care providers.


We waived member copays and coinsurance for in-network COVID-19 testing, treatment, and vaccinations. We also waived prior authorization requirements for long-term skilled nursing and home health care.

S HA R I NG I N FORMAT I ON We kept our stakeholders —members, customers, brokers, providers, employees, and others — informed about the latest clinical knowledge around COVID-19 transmission, prevention, testing, treatment, and vaccines, as information changed throughout the year.


Our call center took on a volunteer project for the Minneapolis Public Schools. Our team called non-English- speaking and vulnerable families for feedback on how students were doing with distance learning and guided the families to supportive resources.


We donated technology equipment to enable telehealth, remote work, and

distance learning, including more than 1,100 pounds of equipment that was refurbished and distributed to health care providers, community organizations, and students in need.


We’ve always advocated for the health and well-being of everyone in the communities we serve. But 2020 delivered a wake-up call. The disproportionate impact of COVID-19 on people of color, George Floyd’s death, and the outcry against injustice that followed made clear our responsibility to do more and be better. We recognized that we must transform the way we do business. Forging relationships We also understand that we don’t have all the answers and that we need to strengthen our relationships in underserved communities. We created a pathway to do so by opening a new office in St. Paul’s racially diverse Midway neighborhood, where many businesses were damaged or destroyed in the unrest. We tapped our relationship with regional business collaborative Greater MSP to help find the right location. And we’re connecting with Midway-area community leaders and nonprofits to identify local job candidates. Enriching our organization Our Midway office brings jobs, training, and economic opportunities to a neighborhood that has long struggled to maintain professional employment options. At the same time, the office enriches our workforce, creates space for meaningful listening, and helps us get closer to community members who deserve to be heard. We recognize we can’t fix economic inequality on our own. But as a nonprofit with 45 years of experience in giving back, we can make a difference by more fully immersing ourselves in the communities we serve. Building for the future

“This is a tremendous example of an organization intentionally locating to provide jobs and access and opportunity, and to establish a footprint and build relationships with new talent.” Channon Lemon Vice President of Economic Development St. Paul Area Chamber


Located in the Amherst H. Wilder Foundation building at University Avenue and Lexington Parkway in St. Paul, Minn.

Developed with women- and minority-owned contractors

Capacity for 50 claims and call-center employees

Majority of staff hired from local neighborhoods

Generates $2 million in annual salaries and benefits

Entry-level jobs that lay the foundation for careers in health administration


ACOs rise to the challenge

Our members deserve the best care at the best price. We worked closely with health care providers to deliver on this commitment in 2020. In 1975, a group of Minneapolis doctors started a nonprofit insurance company called Physicians Health Plan, which would later become Medica. Our founders believed health care is better when providers and payers have a close connection. We still believe that. We formed our first accountable care organization (ACO) with Minnesota’s MHealth Fairview system in 2012. An ACO is a collaborative arrangement between a health plan and a care system that lets them share responsibility for the cost, quality, and experience of care for a defined group of members. Today, we participate in ACOs with more than two dozen leading health care systems in nine states. Despite the COVID crisis, our ACO partnerships found solutions to some of health care’s enduring challenges. We’re proud of that.

“MU Health Care collaborated with Medica this past year on a successful ACA marketplace product launch. Through shared strategic vision and mutual trust, we have coordinated to bring value to members and patients in mid-Missouri.”

Jonathan Curtright CEO MU Health Care

Challenge: affordability

Challenge: quality ACOmembers are more likely than those in open-access plans to get recommended cancer screenings. They’re also less likely to visit the ER or be readmitted after a hospital stay. Last year showed us another way the ACOmodel offers better results. During the pandemic, care shifted rapidly to telehealth. Phone calls, video visits, and remote monitoring helped patients stay in touch with providers and get effective care. Fewer in-person appointments let health systems protect staff and conserve personal protective equipment. While telehealth use rose among all of our members in 2020, those enrolled in ACO plans made the most use of the service.

One Iowa-based partner, UnityPoint Health, was worried that people who buy the most affordable type of individual coverage — a low-premium plan with a sizeable deductible —may skip or delay basic care to avoid the up-front costs. We shared that concern. Prompt, effective primary care can keep an everyday injury or illness from turning into a serious (and expensive) issue. Moreover, a health plan you can afford to buy but can’t afford to use isn’t an affordable plan. So we worked with UnityPoint Health to design a new low-premium ACO plan that covers primary care and mental health office visits, urgent care, and virtual visits with UnityPoint Health providers at 100% after the member chips in a $5 copay. We knew this approach also would meet needs in other places, so we shared it with other ACO partners. During the national open enrollment period for 2021 coverage, we introduced our new $5 Preferred Primary Care Plan for individuals and families in Iowa with UnityPoint Health, and in Kansas and Missouri with Saint Luke’s Health System. It was an immediate hit —more than 6,000 members enrolled across the three states.

2020 growth in telehealth usage

Challenge: experience


We launched a new ACO in 2020 with Hennepin Healthcare, a Minneapolis-based integrated care system. With the prevalence of diabetes among Minnesota adults at an all-time high of nearly 8%*, we identified this chronic condition as a clinical priority and member experience opportunity for the partnership. This ACO is our first to offer a virtual diabetes management system at no cost to members. Pops ® Diabetes Care lets members check blood sugar levels on the go using a mobile meter kit, get encouragement and reminders from a virtual coach available 24/7 through the Pops app, and share data with caregivers and health care providers.


Members enrolled in open access plans

Members enrolled in ACO plans

* Source:

Our accomplishments reflected our values: customer


We had the most successful ACO launch in our history with Balance by Medica SM , a portfolio of plans for individuals and families offered in partnership with Mercy Health System in Missouri and Oklahoma. More than 10,000 people enrolled. ACO L AUNCH

We extended our $25 out-of-pocket limit for insulin to all individual and fully insured group members across our nine-state service area.

We maintained our position as the nation’s top carrier for Medicare Cost Plans and entered the top 20 for overall Medicare membership. # 1 ME D I CA R E CA R R I E R

2020 HIGH

focus, excellence, stewardship, integrity, and diversity.


The National Committee for Quality Assurance renewed our accreditation and gave us a perfect score on its difficult

All of our Medicare plans achieved ratings of either 4 or 4.5 out of five stars in the Medicare STAR quality ratings for the 2021 plan year. ME D I CA R E S TA R S

new population health measures.

HLIGHTS We doubled our paid volunteer time off benefit to 32 hours so our employees could provide more help in their communities during 2020. COMMUN I T Y S U P PORT

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Our social impact We established the Medica Foundation in 1992 to invest in community-led initiatives that expand access to care, improve health, and advance equity in the communities we serve. In 2020, the Foundation awarded 206 grants to nonprofits in Minnesota, Nebraska, Iowa, North Dakota, South Dakota, and Wisconsin. We concentrated our giving for strategic impact in the following areas:



Crisis relief

Rural health

$895,000 Behavioral health


General health improvement

$735,000 Early childhood health


2 0 6 GR ANT S TOTA L I NG $ 4 . 2 5 M I L L I ON

Extraordinary times, extraordinary support 2020 presented the largest public health emergency in a century, and we responded swiftly to support our communities. Over the course of the year, our foundation leaned into its strong relationships and trust established in the nonprofit community to identify and speed relief to areas of greatest need. We awarded crisis-relief grants that enabled nonprofits to deliver services in the pandemic environment, supported communities recovering from social unrest, and addressed social determinants of health like food security and economic stability.

Here’s a closer look at how we allocated the Medica Foundation’s crisis-relief funding: We met the moment with $1.95 million in grants

Mental health telehealth

Community health centers

Youth + families

Workforce inequities

Disaster relief

Food security

Emergency shelter + housing

Community support

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Speeding aid to COVID-19 responders As soon as COVID-19 emergency orders went into effect in mid-March, our Foundation team contacted our nonprofit partners about emerging needs. Their goals: Identify opportunities for maximum impact and rush financial support to the areas of greatest need. In less than twoweeks, we awarded $1.2million in grants soMinnesota andNebraska community organizations could meet the surging demand for services. Several grant recipients noted that Medica was one of the first foundations to provide assistance — and that our support had spurred other funders to act quickly.

Testing and care OneWorld Health Center is a federally qualified health center that primarily serves Omaha’s Hispanic community. We supported its efforts to provide safe, accessible COVID-19 testing and medical care with a $40,000 grant and a donation of more than 5,000 disposable face masks. Impact: OneWorld Health Center served more than 9,700 people with drive-through testing, virtual visits, and medication delivery. Thirty-four percent of the people it tested during the fall of 2020 were found to be infected with COVID-19. The nonprofit also used our support to deliver groceries, diapers, and other personal care items to patients and families who were isolating at home.

Virtual prenatal care Hennepin Healthcare Foundation supports Hennepin Healthcare, a nonprofit care system that includes primary care clinics, community health services, and Minnesota’s largest safety-net hospital and Level 1 trauma center. Its mission is to ensure access to outstanding care that attracts a culturally and financially diverse patient population. Our $100,000 grant helped with the rapid conversion of its prenatal care services from a series of in-person tests and appointments to telehealth. Impact: Hennepin Healthcare provided blood pressure cuffs and thermometers to 1,800 pregnant women so they could monitor vital signs at home and report their results during virtual prenatal visits. Several patients reported pregnancy-related high blood pressure readings, which can be dangerous. Fortunately, all of the cases were caught early and resolved with good outcomes for the mothers and babies.

Behavioral health services Mental Health Resources Inc. (MHR) is a St. Paul nonprofit that provides adult mental health and substance use disorder services. We granted $100,000 to help MHR transition its substance use disorder counseling and case management services to telehealth delivery platforms. Impact: More than 6,000 clients continued to receive care and support with minimal disruption. Many clients were able to make progress and thrive in recovery throughout the pandemic.

Caring for communities in pain Our Foundation team sprang into action again in early June to speed aid to organizations that serve Twin Cities communities most affected by racial inequities and the social unrest that followed the murder of George Floyd. In a matter of weeks, we issued $550,000 in crisis-relief grants to 20 nonprofit organizations that are led by and serve people of color. Our funding supported food access, physical andmental health, and youth and family needs.

Helping and healing Open Cities Health Center is a safety- net health care provider in St. Paul that serves people of color, immigrants, and refugees. Many of its clients also experience mental health trauma, housing insecurity, and difficulty accessing healthy food. We awarded Open Cities a $50,000 emergency grant. Impact: Open Cities formed an emergency response outreach team that provided COVID-19 testing for 9,000 people in targeted underserved communities representing a wide range of ethnicities and backgrounds.

Learning support

Emergency shelter

Northside Achievement Zone (NAZ) strives to permanently close the achievement gap and end generational poverty in north Minneapolis. This nonprofit helps low-income children of color graduate from high school and prepare for college. NAZ also received a $25,000 emergency grant. Impact: NAZ delivered training and workshops for more than 300 educators and community service providers to address the challenges of distance learning and the wounds brought on by the social unrest following George Floyd’s death.

American Indian Community Development Corp. (AICDC) is a social-services nonprofit that provides housing and culturally unique programs to strengthen Minneapolis’ American Indian community. We supported AICDC with a $25,000 emergency grant. Impact: Our funding helped AICDC operate an overnight drop-in center that provided showers, personal hygiene items, and a safe place to sleep for 803 American Indians and others who experienced homelessness during 2020, including the period of social unrest.

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2 0 2 0 CR I S I S R E S PON S E


Supporting access to nutritious food Food insecurity re-emerged as an urgent concern during 2020. The pandemic and its effect on the economy disrupted access to food for people across our service area, while social unrest in late May and early June compounded the problem in Minneapolis and St. Paul. For all of these reasons, some of our most vulnerable neighbors were more likely to suffer from food insecurity. Through our close connections in the nonprofit community, Medica and the Medica Foundation were able to respond quickly. We provided a total of $675,000 to 52 nonprofits that worked to prevent hunger and reduce disparities in food access.

Home delivery Open Arms of Minnesota is a nonprofit that prepares medically tailored meals for people with life-threatening illnesses and delivers those meals to its clients’ homes. All of Open Arms’ clients have compromised immune systems that made themmore susceptible to the pandemic, and a third of themwere directly impacted by the social unrest. Impact: We provided $25,000 in funding to help Open Arms meet its clients’ dietary needs and respond to a 40% increase in demand for its meals during the pandemic.

Helping neighbors

Cultural preferences Community Emergency Service Inc. (CES) is a Minneapolis food shelf and home-delivery program that serves refugees, immigrants, homebound seniors, and adults with disabilities. Eighty percent of its clients identify as people of color, primarily Black and Hispanic. Impact: CES used our $10,000 crisis- relief grant to buy and distribute more than 2,300 pounds of culturally preferred lean meats, poultry, and seafood, including lamb, goat, tilapia, and chicken. Demand for its services more than doubled during the pandemic.

Food Bank for the Heartland is an Omaha-based nonprofit that supplies more than 550 food pantries, meal providers, schools, churches, and hunger-relief organizations in Iowa and Nebraska. Impact: We provided a $10,000 crisis- relief grant that enabled Food Bank for the Heartland to deploy mobile pantries for safe, contact-free food distribution during the pandemic. It experienced a 72% increase in meals served during 2020 compared to 2018.

Advancing equity in employment As we committed to bring jobs and economic opportunities to St. Paul’s Midway neighborhood, we also recognized the need for investment in job training, career development, and economic advancement for people of color across the Twin Cities. People with steady employment are more likely to be able to afford housing and healthy foods, which support their overall health and well-being.

In 2020, theMedica Foundation awarded $200,000 in grants to eight nonprofits that are building capacity for economic achievement in 2021 and beyond. For example, our funding activates:

• A summer program that helps students of color navigate the transition from high school to college

• An emergency fund that helps students overcome systemic barriers to educational achievement

• A business advisor who consults and provides business development training for entrepreneurs in north Minneapolis

• A program that provides mentoring and support for students of color to graduate from high school

• A workforce skills development program for African descendants that supports job readiness, resume writing, and job seeking

• A life-skills coach who supports formerly incarcerated men as they build skills to navigate employment pathways

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The power of local banking

Our customers and members count on our financial strength to cover the cost of their health benefits. To meet this obligation, we hold reserves in credible financial institutions. Our longstanding practice had been to place our reserves almost exclusively with large national banks. But a 2019 conversation between our CEO and the president of an Edina, Minn., community bank changed our thinking and led us to put some of our reserves to work at the local level in 2020. With no inkling of the economic crisis to come, we teamed with Independent Community Bankers of Minnesota (ICBM) in January to deposit $20 million of reserves in local banks across the state. ICBM member banks completed a short application to tell us how they would use the deposits, and we purchased $250,000 certificates of deposit from all 80 that applied.

Many banks that participated in the initial round of funding are located in rural communities that depend on the struggling agriculture sector. These same towns have declining populations and older homes in need of repair. One bank saw a need to support shops that would suffer while road construction routed traffic away from the town’s business district. We expanded our community banking commitment twice during 2020 in response to the pandemic and social unrest. In May, we made $15 million in deposits available to local banks in Nebraska. In July, we deposited $1 million in four neighborhood banks in Minneapolis and St. Paul to help local and minority-owned businesses rebuild and recover.

“In small rural communities such as ours, the credit needs of our clientele often exceed our ability to raise deposits locally, so your deposit will allow us to continue making loans to small businesses and farms.”

Darin Latterell Vice President, Kelliher Branch First State Bank of Bigfork Bigfork, Minn.

We’re a nonprofit health plan. That means we don’t work to make money for shareholders. We invest our earnings into delivering on our commitments to you and your community. 2020 financial summary

Board of directors

John Buck †* CEO Whitefish Ventures

Combined balance sheet (in millions): Assets

Rajesh Aggarwal, Ph.D. Professor of Finance, D’Amore-McKim School of Business Northeastern University

2020 2019

Cash and investments

$2,406 $1,968

Other assets

$504 $632

Total assets

$2,910 $2,600

Brigid Bonner Chief Experience Officer CaringBridge

Liabilities and net assets

2020 2019

Peter Kelly, M.D., M.H.A. Vice President & Executive Medical Director of Perioperative Services MHealth Fairview Samuel Leon, M.D. * Physician MNGI Digestive Health, P.A.

Claims payable

$548 $531

Other liabilities

$610 $416

Total liabilities

$1,158 $945

Net assets

$1,752 $1,653

Total liabilities and net assets

$2,910 $2,600

Gaye Adams Massey, J.D. CEO YWCA St. Paul

Combined statement of operation and changes in net assets (in millions): Revenue 2020 2019 Premiums, net of reinsurance $4,450 $4,532 Administrative service contract fees $109 $125 Total revenue $4,559 $4,657

John Naylor President & CEO Medica

John Stanoch, J.D. ‡ * Retired Judge Hennepin County District Court Earl D. Stratton Retired Executive Vice President & Chief Information Officer TCF Financial Corporation Esther Tomljanovich, J.D. * Retired Associate Justice Minnesota Supreme Court Mary Twinem * Retired Executive Vice President, Chief Financial Officer & Treasurer Buffalo Wild Wings †Chair ofMedica board ‡Chair of theMedica Foundation board * Also amember of theMedica Foundation board


2020 2019

Medical & other benefits, net of reinsurance

$3,533 $3,587

Other operating expenses

$689 $604

Total expenses

$4,223 $4,191

Operating income

$336 $467

Investment income, income taxes and other non-operating expenses



Net unrealized gains (losses) on investment



Contributions to the Medica Foundation



Change in net assets

$99 $499

Follow us on social media @Medica4Me .

© 2021 Medica | MXC51000260-5-00221A

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