<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

                                   (Mark One)


[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Period Ended September 30, 2000.

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the Transition Period From                 to
                               ---------------    --------------

Commission file number 0-21230
                       -------

              Midwest Medical Insurance Holding Company
---------------------------------------------------------------------
  (Exact name of registrant as specified in its charter)

      Minnesota                                     41-1625287
----------------------------------           ----------------------
(State or other jurisdiction of               (I.R.S. Employer
incorporation or organization)               Identification No.)

7650 Edinborough Way, Suite 400
Minneapolis, Minnesota                               55435-5978
-----------------------------------          ----------------------
(Address of principal executive offices)             (Zip Code)

                                952-838-6700
--------------------------------------------------------------------
    (Registrant's telephone number, including area code)


                               Not applicable
--------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

The number of shares outstanding of the issuer's classes of common stock as of
September 30, 2000:

Class A Common Stock, $.01 par value - 6,898 shares

Class B Common Stock, $1,000 par value - 1 share

Class C Common Stock, no par value - 7,009 shares










                                       1
<PAGE>   2
                                      INDEX

                    Midwest Medical Insurance Holding Company


PART  I. FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Condensed consolidated balance sheets - September 30, 2000 and
         December 31, 1999

         Condensed consolidated statements of income - Three months
         ended September 30, 2000 and 1999; Nine months ended September
         30, 2000 and 1999

         Condensed consolidated statements of cash flows - Nine months
         ended September 30, 2000 and 1999

         Notes to condensed consolidated financial statements -
         September 30, 2000

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations

Item 3.  Quantitative and Qualitative Disclosures About Market Risk


PART II. OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

Item 6.  Exhibits and Reports on Form 8-K


SIGNATURES




                                       2
<PAGE>   3
Part I.  Financial Information
         Item 1.  - Financial Statements

           MIDWEST MEDICAL INSURANCE HOLDING COMPANY and SUBSIDIARIES

                      Condensed Consolidated Balance Sheets
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                       September 30              December 31
                                                                           2000                      1999
                                                                   ---------------------     ---------------------
                                                                       (Unaudited)                 (Note A)
<S>                                                                <C>                       <C>
ASSETS
   Fixed maturities at fair value (cost:
       2000 $151,437; 1999 $159,464)                               $            146,094      $            153,950
   Equity securities at fair value (cost:
       2000 $56,423; 1999 $46,216)                                              102,008                   104,898
   Short-term investments                                                        20,313                     9,128
   Other investments                                                             10,915                    10,000
                                                                   ---------------------     ---------------------
                                                                                279,330                   277,976

   Cash                                                                              30                     1,821
   Accrued investment income                                                      2,140                     2,317
   Premiums receivable - Note D                                                  12,070                     7,143
   Reinsurance recoverable on paid and unpaid losses                             15,417                    19,285
   Amounts due from reinsurers                                                        -                     3,833
   Other assets                                                                   9,027                     7,801
                                                                   ---------------------     ---------------------
   Total assets                                                    $            318,014      $            320,176
                                                                   =====================     =====================

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
   Unpaid losses and loss adjustment expenses                      $            117,240      $           $119,141
   Unearned premiums - Note D                                                    22,444                    12,797
   Policyholder dividends - Note E                                               10,564                    10,175
   Deferred income taxes                                                          9,147                    12,201
   Amounts due reinsurers                                                         1,760                         -
   Other liabilities - Note D                                                     5,719                     9,893
   Class A common stock redemptions payable - Note B                              6,917                       366
   Class A redeemable common stock - Note B                                         455                     7,802
                                                                   ---------------------     ---------------------
                                                                                174,246                   172,375

SHAREHOLDERS' EQUITY
   Class B Common Stock; authorized, issued and
     outstanding 1 share - Note B                                                     1                         1
   Class C Common Stock; authorized 300,000 shares,
     issued and outstanding 7,009 shares in 2000
     and 0 shares in 1999 - Note B                                                    -                         -
   Paid-in capital                                                               12,789                    12,789
   Retained earnings                                                            103,902                   100,095
   Accumulated other comprehensive income:
     Net unrealized appreciation of investments                                  27,076                    34,916
                                                                   ---------------------     ---------------------
                                                                                143,768                   147,801
                                                                   ---------------------     ---------------------

   Total liabilities and shareholders' equity                      $            318,014      $            320,176
                                                                   =====================     =====================
</TABLE>


See notes to condensed consolidated financial statements.



                                       3
<PAGE>   4
           MIDWEST MEDICAL INSURANCE HOLDING COMPANY and SUBSIDIARIES

                   Condensed Consolidated Statements of Income
                (Dollars in thousands, except per share amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                      Three months ended                     Nine months ended
                                                                         September 30                           September 30
                                                                 ----------------------------            ---------------------------
                                                                   2000                1999                2000                1999
                                                                 --------            --------            --------            -------
<S>                                                              <C>                 <C>                 <C>                 <C>
Revenues:
  Net premiums earned                                            $ 11,025            $ 14,576            $ 32,110            $35,363
  Net investment income                                             3,056               3,047               9,097              8,853
  Net realized capital gains                                        3,778               1,649              10,108              7,716
  Other                                                               675                 495               3,949              2,227
                                                                 --------            --------            --------            -------
                                                                   18,534              19,767              55,264             54,159

Losses and expenses:
  Losses and loss adjustment expenses                              10,190               9,717              30,833             29,664
  Policyholder dividends - Note E                                   8,000              10,100               8,000             10,100
  Underwriting, acquisition and
    insurance expenses                                              1,630               1,847               5,924              6,126
  Other operating expenses                                          2,547               1,435               5,904              4,553
                                                                 --------            --------            --------            -------
                                                                   22,367              23,099              50,661             50,443

                                                                 --------            --------            --------            -------
  Income (loss) before income tax
    expense (benefit)                                              (3,833)             (3,332)              4,603              3,716

  Income tax expense (benefit) -
    Note C                                                           (274)             (1,109)                (66)             1,360
                                                                 --------            --------            --------            -------
  Net income (loss)                                              $ (3,559)           $ (2,223)           $  4,669            $ 2,356
                                                                 ========            ========            ========            =======

</TABLE>

See notes to condensed consolidated financial statements.




                                       4
<PAGE>   5
           MIDWEST MEDICAL INSURANCE HOLDING COMPANY and SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                             (Dollars in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                     Nine months ended
                                                                                        September 30
                                                                            -----------------------------------
                                                                               2000                     1999
                                                                            ---------                ----------
<S>                                                                         <C>                      <C>
OPERATING ACTIVITIES
   Net income                                                               $  4,669                 $   2,356
   Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Increase in premiums receivable                                         (4,927)                  (11,566)
      (Increase) decrease in reinsurance recoverable
         on paid and unpaid losses                                             3,868                      (161)
      Decrease in amounts due from reinsurers                                  3,833                       399
      Increase in unearned premiums                                            9,647                    14,511
      Increase in policyholder dividends                                         389                    10,100
      Decrease in retrospective premiums                                          --                    (8,543)
      Decrease in other liabilities                                           (4,174)                   (1,218)
      Net realized capital gains                                             (10,108)                   (7,716)
      Other changes, net                                                       1,016                      (166)
                                                                            --------                 ---------
                                                                               4,213                    (2,004)

INVESTING ACTIVITIES
   Purchases of fixed maturity investments and
      equity securities                                                      (80,295)                 (129,200)
   Sales of fixed maturity investments and equity
      securities                                                              83,914                   135,249
   Maturities and calls of fixed maturity investments                          4,184                     2,000
   Net purchase of short-term investments                                    (11,184)                   (5,488)
                                                                            --------                 ---------
                                                                              (3,381)                    2,561

FINANCING ACTIVITIES
   Increase in Class A stock redemptions payable                               6,551                       457
   Redemption of Class A Common Stock                                         (9,174)                     (904)
                                                                            --------                 ---------
                                                                              (2,623)                     (447)
                                                                            --------                 ---------

Increase (decrease) in cash                                                   (1,791)                      110
Cash at beginning of year                                                      1,821                       647
                                                                            --------                 ---------
CASH AT SEPTEMBER 30                                                        $     30                 $     757
                                                                            ========                 =========

</TABLE>



See notes to condensed consolidated financial statements.




                                       5
<PAGE>   6
           MIDWEST MEDICAL INSURANCE HOLDING COMPANY and SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

                               September 30, 2000


NOTE A - BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements
of Midwest Medical Insurance Holding Company and its subsidiaries have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and notes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for any interim period are not necessarily indicative of the results
that may occur for the full year. These interim financial statements should be
read in conjunction with the 1999 consolidated financial statements and notes
thereto included in Midwest Holding's Annual Report on Form 10-K as filed with
the Securities and Exchange Commission.

The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States for complete financial statements.

Certain amounts applicable to prior periods have been reclassified to conform to
the classifications followed in the current year. All intercompany amounts have
been eliminated.

NOTE B - CAPITAL STRUCTURE

Midwest Holding is in the process of redeeming all Class A shares according to
the terms of the tender offer as filed with the Securities and Exchange
Commission (see Item 6(a). Exhibit 2B. of this report). As of September 30,
2000, shareholders owning over 95% of the Class A shares had accepted the tender
offer. Upon accepting the tender offer, all of the shareholder's Class A shares
are exchanged for $66.00 for each Class A share owned, plus one Class C share.
Thus, of the 300,000 authorized Class A shares, only 6,898 Class A shares were
issued and outstanding as of September 30, 2000 compared to 123,509 shares as of
December 31, 1999. Like the Class A shares, Class C shares are not publicly or
privately traded. Class C shareholders, however, do not accrue additional shares
and the Class C shares have no redemption value. Class C shares are returned to
Midwest Holding upon termination of the shareholder's insurance coverage with
Midwest Medical.

As a result of the above, Midwest Holding has recorded a Class A common stock
redemptions payable to shareholders who have accepted the tender offer. Payments
to shareholders are being processed as soon as administratively feasible and are
anticipated to be substantially completed by the end of the year. The remaining
Class A shareholders who have yet to tender their shares are classified as
redeemable common stock under the liabilities section of the balance sheet.
Midwest Holding anticipates that these shareholders will eventually tender their
shares. The one Class B share and the Class C shares are recorded as components
of shareholders' equity.



                                       6
<PAGE>   7

NOTE C - INCOME TAXES

Midwest Holding calculates its income tax provision for interim periods by
estimating its annual effective tax rate and applying this rate to the income of
the interim period. The estimated annual effective tax rate used for the three
and nine-month periods ended September 30, 2000 and 1999 was approximately 35%.
During the second quarter of 2000, Midwest Medical Insurance Company received
$4,418,000 in federal tax refunds including interest resulting from the IRS
examinations for the 1992 to 1996 tax years. The tax refunds totaling $2,715,000
were recorded as an income tax benefit while the $1,703,000 of interest was
recorded to other revenues. During the third quarter of 2000, Midwest Medical
revised the estimated tax rate used to calculate the deferred tax on
non-investment assets and liabilities. The estimated tax rate was lowered to 34%
from 39.46% to eliminate the state income tax component. Due to Midwest
Medical's increase in premium volume in recent years, state premium tax credits
nearly offset state income taxes. The revision resulted in Midwest Medical
recording an additional $1,050,000 of deferred tax expense in the third quarter.

NOTE D - UNEARNED PREMIUMS, PREMIUMS RECEIVABLE and OTHER LIABILITIES

The majority of Midwest Medical's insurance policies expire at December 31 and
renew on January 1 of each year. As a result, the majority of the unearned
premium amount at September 30, 2000 represents three months of unearned premium
for every active policy renewed or newly written on January 1, 2000 with an
expiration date of December 31, 2000. At December 31, 1999, most active 1999
policies expired and therefore had no unearned premium.

Of the total unearned premium balance of $12,797,000 at December 31, 1999,
$6,905,000 is reserved to recognize Midwest Medical's obligation to provide
reporting endorsement coverage without additional premium upon the death,
disability or retirement of policyholders. That same amount is also included in
the unearned premium balance at September 30, 2000 and represents the
actuarially determined present value of future benefits to be provided less the
present value of future revenues to be received.

The increase of $4,927,000 in premiums receivable from December 31, 1999 to
September 30, 2000 is primarily due to the renewal of most active policies on
January 1. The full year's premium is recorded as written and collectible at
January 1. Premiums may be paid annually or quarterly and each year's premium is
nearly all collected during the year. The receivable balance remaining at the
end of the year primarily relates to the small number of policies underwritten
by Midwest Medical that have other than December 31 expiration dates.

Of the total other liabilities balance of $9,893,000 at December 31, 1999,
$5,568,000 is for premium payments received from policyholders in advance of
their January 1, 2000 policy renewal. No advance premium payments were recorded
at September 30, 2000.





                                       7
<PAGE>   8
NOTE E - POLICYHOLDER DIVIDENDS

In 1999, Midwest Medical instituted a policyholder dividend program that
replaced the previous retrospective premium credit program for physicians.

To implement the policyholder dividend program, Midwest Medical issued
participating policy endorsements to all active physician and clinic accounts
during 1999 and will issue participating policy endorsements to all active
hospital accounts during 2000. Participating policies represented 96% and 91% of
total premiums in force and premium income at September 30, 2000 and December
31, 1999, respectively.

During the third quarter of 2000, Midwest Medical's Board of Directors declared
an $8,000,000 dividend to be paid to physician and clinic policyholders in 2001.
The dividends will be awarded proportionately based on annual premiums for
physician and clinic policyholders that were insured by Midwest Medical in 1996
and remain insured throughout 2001. The dividend will be paid to physician and
clinic policyholders in four equal installments in February, May, August and
November 2001.

NOTE F - SEGMENT INFORMATION

Midwest Holding is organized into five legal entity business segments. The
segments are described under the "Background" section in Item 1 of the 1999
Annual Report on Form 10-K. The following financial information summarizes the
results of operations and total assets reported by Midwest Holding's five
business segments for the three and nine-month periods ended September 30, 2000
and 1999 (in thousands).




                                       8
<PAGE>   9
NOTE F - SEGMENT INFORMATION (continued)

<TABLE>
<CAPTION>
                                                           Three months ended September 30, 2000
                         ----------------------------------------------------------------------------------------------------------
                              Midwest        Midwest
                              Holding        Medical    Services     Solutions       MedPower    Eliminations(1)       Consolidated
                         ----------------------------------------------------------------------------------------------------------
<S>                        <C>             <C>          <C>          <C>             <C>         <C>                   <C>
Revenues:
   External customers      $      -        $ 11,129     $   382      $   111         $    76        $        -         $    11,698
   Intersegment               3,983               -           -            2               -           (3,985)                   -
   Net investment income      (230)           2,998           1            8              10               269               3,056
   Other(2)                      38           3,742           -            -               -                 -               3,780
                         ----------------------------------------------------------------------------------------------------------
                              3,791          17,869         383          121              86           (3,716)              18,534

Total expenses                4,865          20,083         441          501             193           (3,716)              22,367
                         ----------------------------------------------------------------------------------------------------------

Income (loss) before
   income taxes             (1,074)         (2,214)        (58)        (380)           (107)                 -             (3,833)
Income tax expense
   (benefit)                  (365)             275        (18)        (129)            (37)                 -               (274)
                         ----------------------------------------------------------------------------------------------------------
Net income (loss)          $  (709)        $(2,489)      $ (40)       $(251)          $ (70)        $        -         $   (3,559)
                         ==========================================================================================================

Total assets               $155,606        $311,580      $2,214       $2,242          $1,246        $(154,874)         $   318,014
                         =========================================================================================================
</TABLE>

(1)      Intersegment eliminations for revenues and expenses are primarily for
         management, administrative and investment services provided by Midwest
         Holding. Eliminations for assets consist primarily of investments in
         wholly-owned subsidiaries, intersegment receivables for management fees
         and reclassifications between assets and liabilities primarily for
         taxes.

(2)      Other revenues consist primarily of net realized capital gains and
         interest received on federal income tax refunds.




                                       9
<PAGE>   10

NOTE F - SEGMENT INFORMATION (continued)

<TABLE>
<CAPTION>
                                                            Three months ended September 30, 1999
                           --------------------------------------------------------------------------------------------------------
                                Midwest      Midwest
                                Holding      Medical      Services     Solutions       MedPower    Eliminations(1)     Consolidated
                           --------------------------------------------------------------------------------------------------------
<S>                          <C>           <C>            <C>          <C>             <C>         <C>                 <C>
Revenues:
   External customers        $      --     $  14,589      $   372      $    --          $   108      $      --          $  15,069
   Intersegment                  4,395            --           --           --                5         (4,400)                --
   Net investment income          (203)        3,004            6            3                2            235              3,047
   Other(2)                         31         1,620           --           --               --             --              1,651
                           --------------------------------------------------------------------------------------------------------
                                 4,223        19,213          378            3              115         (4,165)            19,767

Total expenses                   4,218        21,958          394          287              407         (4,165)            23,099
                           --------------------------------------------------------------------------------------------------------

Income (loss) before
   income taxes                      5        (2,745)         (16)        (284)            (292)            --             (3,332)
Income tax expense
   (benefit)                        30          (953)          (6)         (88)             (92)            --             (1,109)
                           --------------------------------------------------------------------------------------------------------
Net income (loss)            $     (25)    $  (1,792)     $   (10)     $  (196)         $  (200)     $      --          $  (2,223)
                           ========================================================================================================

Total assets                 $ 150,656     $ 295,358      $ 1,577      $ 1,985          $ 1,439      $(148,234)         $ 302,781
                           ========================================================================================================

</TABLE>


(1)      Intersegment eliminations for revenues and expenses are primarily for
         management, administrative and investment services provided by Midwest
         Holding. Eliminations for assets consist primarily of investments in
         wholly-owned subsidiaries, intersegment receivables for management fees
         and reclassifications between assets and liabilities primarily for
         taxes.

(2)      Other revenues consist primarily of net realized capital gains.





                                       10
<PAGE>   11


NOTE F - SEGMENT INFORMATION (continued)

<TABLE>
<CAPTION>
                                              Nine months ended September 30, 2000
                            -------------------------------------------------------------------------------------------------------
                               Midwest       Midwest
                               Holding       Medical      Services        Solutions     MedPower   Eliminations(1)     Consolidated
                            -------------------------------------------------------------------------------------------------------
<S>                          <C>           <C>            <C>             <C>           <C>        <C>                 <C>
Revenues:
   External customers        $      --     $  32,698      $ 1,271          $   141      $   232      $      --          $  34,342
   Intersegment                 12,361            --           --               12           --        (12,373)                --
   Net investment income          (688)        8,942            7               13           19            804              9,097
   Other(2)                        132        11,693           --               --           --             --             11,825
                            -------------------------------------------------------------------------------------------------------
                                11,805        53,333        1,278              166          251        (11,569)            55,264

Total expenses                  13,113        45,561        1,337            1,590          629        (11,569)            50,661
                            -------------------------------------------------------------------------------------------------------

Income (loss) before
   income taxes                 (1,308)        7,772          (59)          (1,424)        (378)            --              4,603
Income tax expense
   (benefit)                      (437)        1,002          (18)            (484)        (129)            --                (66)
                            -------------------------------------------------------------------------------------------------------

Net income (loss)            $    (871)    $   6,770      $   (41)         $  (940)     $  (249)     $      --          $   4,669
                            =======================================================================================================

Total assets                 $ 155,606     $ 311,580      $ 2,214          $ 2,242      $ 1,246      $(154,874)         $ 318,014
                            =======================================================================================================
</TABLE>


(1)      Intersegment eliminations for revenues and expenses are primarily for
         management, administrative and investment services provided by Midwest
         Holding. Eliminations for assets consist primarily of investments in
         wholly-owned subsidiaries, intersegment receivables for management fees
         and reclassifications between assets and liabilities primarily for
         taxes.

(2)      Other revenues consist primarily of net realized capital gains and
         interest received on federal income tax refunds.



                                       11
<PAGE>   12


NOTE F - SEGMENT INFORMATION (continued)

<TABLE>
<CAPTION>

                                                                  Nine months ended September 30, 1999
                                   -----------------------------------------------------------------------------------------------
                                          Midwest     Midwest
                                          Holding     Medical   Services   Solutions    MedPower    Eliminations(1)  Consolidated
                                   -----------------------------------------------------------------------------------------------
<S>                                 <C>              <C>        <C>        <C>         <C>         <C>              <C>
Revenues:
   External customers                  $      --     $ 36,058    $1,210     $    --     $   316     $      --         $ 37,584
   Intersegment                           12,455           --        --          --          12       (12,467)              --
   Net investment income                    (623)       8,714        15          15          11           721            8,853
   Other(2)                                   54        7,668        --          --          --            --            7,722
                                   -----------------------------------------------------------------------------------------------
                                          11,886       52,440     1,225          15         339       (11,746)          54,159

Total expenses                            11,902       46,701     1,171       1,096       1,319       (11,746)          50,443
                                   -----------------------------------------------------------------------------------------------

Income (loss) before
   income taxes                              (16)       5,739        54      (1,081)       (980)           --            3,716
Income tax expense
   (benefit)                                  25        2,016        19        (367)       (333)           --            1,360
                                   -----------------------------------------------------------------------------------------------
Net income (loss)                      $     (41)    $  3,723    $   35     $  (714)    $  (647)    $      --         $  2,356
                                   ===============================================================================================

Total assets                           $ 150,656     $295,358    $1,577     $ 1,985     $ 1,439     $(148,234)        $302,781
                                   ===============================================================================================
</TABLE>


(1)      Intersegment eliminations for revenues and expenses are primarily for
         management, administrative and investment services provided by Midwest
         Holding. Eliminations for assets consist primarily of investments in
         wholly-owned subsidiaries, intersegment receivables for management fees
         and reclassifications between assets and liabilities primarily for
         taxes.

(2)      Other revenues consist primarily of net realized capital gains.




                                       12
<PAGE>   13
NOTE G - COMPREHENSIVE INCOME

The components of Midwest Holding's comprehensive income are net income and
changes in net unrealized appreciation of investments. Total comprehensive
income was $(8,635,000) and $(3,171,000) for the three and nine-months ended
September 30, 2000 and $(5,912,000) and $(4,664,000) for the three and
nine-months ended September 30, 1999.

NOTE H - DISCONTINUANCE OF EARNINGS PER SHARE DATA

In the event of a liquidation, sale or similar transaction, Class C shareholders
would participate according to a formula not based upon the number of Class C
shares owned (refer to the Offering Circular filing per Item 6(a). Exhibit 2B.).
This, along with the other unique characteristics of Class C shares as described
in Note B, results in a distorted earnings per share that does not reflect the
income available to Class C common shareholders. Consequently, Midwest Holding
has discontinued the disclosure of earnings per share data to avoid misleading
readers of its financial statements.

Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations

General

The following analysis of the financial condition and results of operations of
Midwest Holding and its wholly-owned subsidiaries, Midwest Medical, MMIHC
Insurance Services, Inc., Midwest Medical Solutions, Inc., and MedPower
Information Resources, Inc. should be read in conjunction with the condensed
consolidated financial statements and notes thereto included in this report.
Midwest Holding and its subsidiaries are collectively referred to as Midwest
Holding unless the reference pertains to a specific entity.

Capital Resources and Liquidity

The majority of Midwest Holding's assets, 88% at September 30, 2000 and 87% at
December 31, 1999, are invested in investment-grade bonds, equities and
short-term instruments. Midwest Holding's investments in debt and equity
securities are classified as available for sale and are therefore carried at
fair value with unrealized gains and losses, net of applicable taxes, reflected
as a separate component of shareholders' equity. Other investments consist of
equity interests in non-traded real estate investment trusts (REIT) that are
also classified as available for sale and are recorded at the fair value
determined by the most recent independent appraisal. Prior to receiving the
initial appraisal in the first quarter of 2000, Midwest Holding had recorded the
REIT at cost.

Operations generated $4,213,000 of positive cash flow during the first nine
months of 2000 compared to $(2,004,000) of negative cash flow for the same
period of 1999. During the first nine months of 2000, reinsurers paid $5,408,000
to Midwest Medical for favorable experience adjustments on the 1992-1994 and
1995-1997 reinsurance contracts. Federal tax refunds of $4,418,000 including
interest also contributed to the positive operating cash flow. These positive
cash flows were partially offset by $7,611,000 of policyholder dividend payments
made in the first nine months of 2000. The negative operating cash flow in the
first nine months of 1999 was primarily due to the payment of $8,886,000 in
retrospective premium credits.



                                       13
<PAGE>   14
Capital Resources and Liquidity (continued)

Effective July 31, 2000, the Executive Committee of the Board of Directors of
Midwest Holding approved the exchange and redemption of all Class A shares
tendered. Class A shareholders who tender their shares will receive $66.00 for
each Class A share owned, plus one Class C share. The cash payment in connection
with the tender offer redemption of all outstanding Class A shares will total
approximately $9,400,000 and will be funded from Midwest Medical's investment
portfolio. As of September 30, 2000, payments of approximately $2,051,000 had
been made to shareholders for tender offer stock redemptions.

Midwest Holding believes that its cash, investments and internally generated
funds will be sufficient to meet normal operating requirements and the
redemption of Class A common stock per the tender offer.

Shareholders' equity decreased by $4,033,000 during the first nine months of
2000. Net income of $4,669,000 was offset by net unrealized losses in the fair
value of investments, net of deferred taxes, of $(7,840,000).

Results of Operations

Net premiums earned decreased $3,253,000 for the first nine months of 2000
compared to the same period of 1999. Favorable experience adjustments on the
1992-1994 and 1995-1997 reinsurance contracts totaled $946,000 in 2000 compared
to $4,337,000 of favorable experience adjustments in 1999. Greater reinsurance
costs of approximately $978,000 on the current year also caused net premiums
earned to decrease. These added reinsurance costs resulted from policyholders
purchasing higher limits and the new, reinsured fraud & abuse program provided
free of charge to Midwest Medical policyholders up to a $10,000 limit per
policy. New business generating approximately $1,580,000 of additional earned
premium partially offset the above decreases.

Net capital gains of $10,108,000 were realized during the first nine months of
2000. In addition to first quarter sales of appreciated technology common stocks
to maintain appropriate diversification, the outside, domestic equity investment
manager began selling selected equities in the third quarter to fund Midwest
Holding's tender offer redemption of Class A shares. Future levels of realized
capital gains or losses are difficult to predict as investment managers purchase
and sell securities in response to investment policy guidelines and changing
market conditions.

Other revenues increased $1,722,000 for the first nine months of 2000 compared
to the same period of 1999. Interest on federal tax refunds recorded in the
second quarter primarily caused the increase. Revenues from the new information
technology consulting division of Solutions also contributed to the increase.
These increases were partially offset by a decrease in finance charges on
premium billings to Midwest Medical policyholders.




                                       14
<PAGE>   15
Results of Operations (continued)

Losses and loss adjustment expenses increased $1,169,000 for the first nine
months of 2000 versus 1999. The increase in 2000 is largely in response to the
growth in Midwest Medical business and the corresponding exposure in recent
years. Although the effects of interim claim frequency and severity statistics
are not actuarially analyzed, nothing came to management's attention during the
first nine months of 2000 that would materially alter loss expectations for the
remainder of the year.

Policyholder dividends of $8,000,000 were declared in the third quarter of 2000
by Midwest Medical's Board of Directors. This compares to $10,100,000 declared
in the third quarter of 1999. The decrease is primarily due to less favorable
loss experience on the 1996 year compared to the 1995 year on which the
respective policyholder dividends were based. Policyholder dividends represent a
return of prior years' profits that were greater than anticipated due to
favorable claims and investment experience.

Underwriting, acquisition and insurance expenses decreased $202,000 for the
first nine months of 2000 compared to the same period in 1999. Additional ceding
commissions earned by Midwest Medical on the current year reinsurance contract
primarily drove the decrease.

Other operating expenses increased $1,351,000 for the first nine months of 2000
compared to the same period in 1999. Charges related to Midwest Holding's tender
offer to Class A shareholders accounted for most of the increase. Staff
additions, new main office rent and Solutions' project development costs also
contributed to the increase. These increases were partially offset by efficiency
gains from the new MedPower claim processing system.

The first nine months of 2000 incurred an income tax benefit of $66,000 compared
to an income tax expense of $1,360,000 for the same period in 1999. The decline
was primarily due to the federal tax refunds received in the second quarter of
2000 on the 1992 to 1996 tax years. This was partially offset by additional
deferred tax expense recorded by Midwest Medical in the third quarter of 2000
for a revision in the estimated deferred tax rate. Excluding these adjustments,
the effective tax rate was approximately 35% for the nine-month period ending
September 30, 2000.

As a result of the factors discussed above, Midwest Holding realized net income
of $4,669,000 for the nine months ended September 30, 2000 compared to net
income of $2,356,000 for the same period of 1999.

Year 2000 Update

No significant Year 2000 problems have been encountered with respect to Midwest
Holding's internal computer hardware and software, key business partners and
vendors, and insurance policy exposure.

As of the date of this report, no Year 2000 claims have been reported on
policies issued by Midwest Medical. This, along with the overall success of
businesses in dealing with Year 2000 issues, leads Midwest Holding to believe
that it has little, if any, exposure to Year 2000 claims.



                                       15
<PAGE>   16
Year 2000 Update (continued)

The potential does still exist, however, in a worst case scenario for claims to
be made by Midwest Medical policyholders for Year 2000 failures they experience.
In the event Year 2000 claims are made on policies written by Midwest Medical,
Midwest Holding believes these claims will be without merit and will vigorously
defend its position. Depending on whether such claims are deemed to have merit
and to the extent these claims are awarded compensation, such claims could have
a material adverse effect on Midwest Holding's business, financial condition and
results of operations.

Cautionary Note Regarding Forward-Looking Statements

Statements other than historical information contained in this report are
considered to be "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Act
of 1934, as amended.

All forward-looking statements address matters that involve risks and
uncertainties. Accordingly, in addition to the factors discussed in this report,
there are or will be other important factors that could cause actual results to
differ materially from those indicated in such statements. These factors include
but are not limited to:

1.       the impact of changing market conditions on Midwest Holding's business
         strategy;

2.       the effects of increased competition on pricing, coverage terms,
         retention of customers and ability to attract new customers;

3.       greater severity or frequency of the types of losses insured by Midwest
         Medical;

4.       faster or more adverse loss development experience than what Midwest
         Medical had based its underwriting, reserving, and investment
         practices;

5.       developments in global financial markets which could adversely affect
         the performance of Midwest Holding's investment portfolio;

6.       litigation, regulatory or tax developments which could adversely affect
         Midwest Holding's business;

7.       risks associated with the introduction of new products and services;

8.       dependence on key personnel; and

9.       the impact of mergers and acquisitions.

The facts set forth above should be considered in reviewing any forward-looking
statement contained in this report. The important factors that could affect such
forward-looking statements are subject to change, and Midwest Holding does not
intend to update any forward-looking statement or the foregoing list of
important factors. By this cautionary note, Midwest Holding intends to rely upon
the safe harbor from liability with respect to forward-looking statements
provided by Section 27A and Section 21E referred to above.


                                       16
<PAGE>   17

Item 3. - Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss that may occur when fluctuations in interest and
foreign currency exchange rates and equity and commodity prices change the value
of a financial instrument. Both derivative and nonderivative financial
instruments have market risk. Midwest Holding is primarily exposed to interest
rate risk on its investment in fixed maturities, equity price risk on its
investment in equity securities, and foreign currency exchange rate risk on its
investment in international equity securities.

No material changes have occurred in any of Midwest Holding's market risks since
the year ended December 31, 1999.

Part II. Other Information

Item 4. - Submission of Matters to a Vote of Security Holders

         (a)      A special meeting of the class A shareholders of Midwest
                  Holding was held on Thursday, June 29, 2000.

         (c)      The special meeting of June 29, 2000 considered the adoption
                  of a new Article 4.c to the Articles of Incorporation of
                  Midwest Holding. Under the new Article 4.c, the Board of
                  Directors is authorized to establish one or more additional
                  series and classes of common or preferred stock, setting forth
                  the designation of each such series or class, and fixing the
                  relative rights and preferences of each such series or class.
                  Class A shareholders of Midwest Holding approved the adoption
                  of Article 4.c by the following vote:

<TABLE>
<S>                                              <C>
                           Yes                          1,747
                           No                              12
                           Abstain                         15
                                                 ------------
                           Total                        1,774
                                                 ============
</TABLE>

Item 6. - Exhibits and Reports on Form 8-K

          (a)     Exhibits

                  2A.      Proxy Statement for a special meeting of Midwest
                           Holding to be held on June 29, 2000. (Incorporated
                           herein by reference to the Schedule 14A filed by
                           Midwest Holding on April 26, 2000, SEC File No.
                           0-21230.)

                  2B.      Offering Circular and all other exhibits to the
                           Schedule TO filed by Midwest Holding on April 26,
                           2000, with respect to a tender offer commenced by
                           Midwest Holding on May 12, 2000, as amended.
                           (Incorporated by reference to the Schedule TO filed
                           by Midwest Holding on April 26, 2000, SEC File No.
                           0-21230.)

                  27.      Financial Data Schedule (electronic filing only)

         (b)      Reports on Form 8-K

                  None



                                       17
<PAGE>   18


Signatures


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                      Midwest Medical Insurance Holding Company
                                     -------------------------------------------
                                                     (Registrant)





Date   November 10, 2000                   /s/ David P. Bounk
       --------------------                -------------------------------------

                                           David P. Bounk
                                           President and Chief Executive Officer




Date   November 10, 2000                   /s/ Niles Cole
       --------------------                -------------------------------------

                                           Niles Cole
                                           Vice President and
                                           Principal Financial Officer and
                                           Principal Accounting Officer



                                       18