UnitedHealthcare, the largest health insurer in the nation, gained a stronger foothold in Colorado with the purchase of independent insurance provider Rocky Mountain Health Plans.
According to the Denver Post
, UnitedHealthcare plans to invest an undisclosed amount in RMHP to “restore the organization’s capital base and help ensure that it becomes a stronger, more sustainable health plan over the long term.”
In exchange for the cash infusion, UnitedHealthcare—which is a subsidiary of Minnetonka-based UnitedHealth Group—will receive access to Colorado’s Medicaid market, including 300,000 customers, most of who live in rural areas where RMHP previously could not provide coverage.
Per the acquisition agreement, RMHP will switch from being a not-for-profit to a for-profit company. UnitedHealthcare will then purchase the stock it is issued from RMHP.
Although terms of the deal were not disclosed, Steve ErkenBrack, CEO of RMHP, told a local newspaper
that UnitedHealthcare will pay about $35 million to $40 million for the company.
The deal is expected to close by the end of the year.