Noted Western Colorado Health Insurer Being Sold To United

GRAND JUNCTION, Colo. (AP) — A scrappy Western Colorado health insurer held up as a national model for keeping down costs is being sold.

Rocky Mountain Health Plans of Grand Junction is being sold to UnitedHealth, the nation's biggest health insurer.

The Daily Sentinel reports that Rocky Mountain's president and CEO says the company decided to sell to restore its capital base.

"They're a national player, we're a community player. That's what we're trying to marry here," said Steve ErkenBrack.

President Barack Obama visited Grand Junction in 2009 when he was talking up his health care overhaul and praised Rocky Mountain Health Plans. National reports from the news media to the New England Journal of Medicine held up the company as a model of affordable care for rural areas.

But now the 42-year-old plan will be switching from a nonprofit entity to a for-profit business. The sale awaits approval by state authorities.

Employees were informed Monday afternoon. Rocky Mountain Health Plans, which employs about 400 people, hopes to finalize the sale by year's end.

The terms of the sale were unclear. The amount of money depends on what the two companies determine to be the fair market value of the plan, which ErkenBrack said right now is somewhere between $35 million and $40 million.

Dr. Michael Pramenko, whose practice works closely with Rocky Mountain Health Plans, said the region stands to benefit from the sale.

"As much as we would love Rocky to stay nonprofit, that doesn't fit the model going forward," Pramenko told the newspaper.

ErkenBrack said nothing will change when it comes to the insurer's products or services. Patients, doctors and hospitals that use Rocky Mountain Health Plans will keep the same plans and pay the same rates.

Last month, the plan announced that because of high costs in parts of the Western Slope, it was largely withdrawing from the state's health insurance exchange in 2017 except for its new Monument Health offering for Mesa County residents, which created a tiered approach to health care providers.

That move forced about 10,000 policyholders who reside outside the county to seek health coverage elsewhere. Statewide, the plan serves about 300,000 individuals.

Brian Davidson, president of St. Mary's Hospital, said consolidations such as these are becoming increasingly common in the health care industry, but he's pleased that United is allowing Rocky to remain locally controlled.

"Scale is everything in the health insurance industry," said Davidson, who was informed of the sale late Monday afternoon. "The more you can spread your overhead, the better you are in the health insurance industry."

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