WellPoint to Compete for Colorado Insurer
WellPoint Health Networks Inc., one of California’s biggest health insurers, said Monday it is interested in buying Rocky Mountain Hospital & Medical Service for more than $200 million to bolster its presence in Colorado.
Rocky Mountain Hospital, the not-for-profit parent company of health insurer Blue Cross Blue Shield of Colorado and Nevada, said earlier this month it expected to be acquired by Anthem Inc. for about $165 million, including a donation of more than $100 million to a charitable foundation.
Anthem said Monday that it has made a firm offer for Rocky Mountain Hospital that includes a charitable donation of at least $140 million and the assumption of about $25 million in debt. Anthem had previously provided Rocky Mountain Hospital with about $50 million in capital through a loan.
WellPoint’s offer will likely be in a range of $200 million to $240 million, including a charitable donation of $140 million, spokesman Peter O’Neill said.
Thousand Oaks-based WellPoint, the parent of Blue Cross of California, said earlier this month it had signed a letter of intent to buy QualMed Plans for Health of Colorado Inc., a 100,000-member health plan owned by Foundation Health Systems Inc.
If Rocky Mountain Hospital is purchased by a for-profit company and converted to for-profit status, it would have to set up a charitable foundation intended to compensate the public for the favorable tax treatment it received as a not-for-profit entity.
Rocky Mountain Hospital said it has about 445,000 members in Colorado and about 60,000 in Nevada.
Anthem is a mutual insurance company based in Indianapolis that licenses the Blue Cross and Blue Shield name in Indiana, Connecticut, Kentucky and Ohio. The company said it doesn’t currently operate plans in Colorado or Nevada.
Anthem said it knows of the WellPoint offer.
“We are convinced that the agreement that we have is a superior agreement,” said Anthem spokeswoman Lauren Green-Caldwell. “We continue to work with Blue Cross Blue Shield of Colorado.”
WellPoint shares fell 63 cents to close at $75.94 on the New York Stock Exchange.
