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UnitedHealthcare buys Rocky Mountain Health Plans

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UnitedHealthcare buys Rocky Mountain Health Plans

UnitedHealthcare Inc. has acquired Rocky Mountain Health Plans, a nonprofit insurance provider based in Grand Junction, Colorado.

Financial terms of the deal were not disclosed. The acquisition is expected to close by year-end.

UnitedHealthcare currently has 1.2 million members statewide but has “limited business overlap” with Rocky Mountain, which provides coverage for nearly 300,000 residents in rural and western Colorado.

Under terms of the acquisition, UnitedHealthcare will invest in Rocky Mountain to “restore the organization's capital base and help ensure that it becomes a stronger, more sustainable health plan over the long term,” according to a news release.

A Rocky Mountain spokesperson says the insurer has faced financial challenges during the last few years, which prompted the organization to seek a partner. She added the acquisition will strengthen the organization financially and help it better control administrative costs.

Rocky Mountain will maintain its brand and management team. It will also continue to be a major employer in Grand Junction. The organization employs approximately 500.

In an emailed statement, Bill Melville, principal analyst at Decision Resources Group, a health care consulting firm, said UnitedHealthcare's acquisition of Rocky Mountain Health Plans will provide the insurer with a “strong foundation in western Colorado.” He added that it will also provide UnitedHealthcare with “an advantage over its closest competitors.”

UnitedHealth Group Inc., the parent company of UnitedHealthcare, is the largest insurer in the nation. It's on pace to report $182 billion in revenue this year, which accounts for 5% of the entire health care economy. Experts expect the big five health insurers, which include UnitedHealth, will continue to merge with other providers to improve their market power, Modern Healthcare reported.

Maria Castellucci writes for Modern Healthcare, a sister publication of Business Insurance.

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