Arrow-right Camera
The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

United Healthcare To Buy Metrahealth

MetraHealth Cos., a health benefits business that has been struggling to keep its customers, is being sold to United Healthcare Inc., a successful operator of health maintenance organizations.

United Healthcare will pay $1.65 billion for MetraHealth, which was created last year when two large insurers, Metropolitan Life Insurance Co. and Travelers Inc. combined their health businesses.

MetraHealth provides insurance, HMOs and other health plans to employees of about 58,000 companies nationwide, including 40 of the Fortune 100. It has more than $4 billion in annual revenue and is expected to earn about $200 million in profits this year.

However, half of its customers have traditional health insurance.

Like other insurers, MetraHealth has faced a stiff challenge from companies that specialize only in managed care.