UnitedHealth shores up individual offerings with agreement to acquire HealthAllies

October 13, 2003

UnitedHealth Group acquired Glendale, Calif.-based HealthAllies, Inc. on Oct. 1 for an undisclosed sum, as part of its ongoing effort to capture more individual insurance enrollees. The move follows UnitedHealth's decision last month to purchase Golden Rule Financial Corp. (MCW 9/22/03, p. 1), a major player in the individual insurance market.

Inside Consumer-Directed Care, also published by Atlantic Information Services, Inc., obtained a client memo from HealthAllies describing the acquisition's objectives. UnitedHealth officials did not return phone calls seeking comment on the deal.

The HealthAllies purchase will give UnitedHealth access to its innovative consumer-driven platform, which enables members to purchase health services at the time of the episode of care, and take advantage of discounted provider rates.

HealthAllies has a variety of benefit plans available to customers enrolled in group-health programs who wish to obtain discounts on services that are not covered or for which only a low level of coverage is available. Products also are available for customers who have "skinny" benefit plans or are uninsured. Members can compare providers' prices, locations and credentials online, and then lock in rates while they obtain services.

The company uses a variety of distribution channels, including brokers, direct sales via its own Web site, and marketing arrangements with other insurers, including UnitedHealth and American International Group, Inc., or AIG.

HealthAllies has grown quickly, expanding from 100,000 enrollees in October 2002 to 300,000 members today. The company also serves corporate clients such as Pitney Bowes Inc. and Burger King Brands, Inc., as well as insurers that are competitors of UnitedHealth Group, the nation's largest health insurer. As a subsidiary of United-Health, HealthAllies will continue to serve these companies and provide services on a private-label basis to intermediaries, says HealthAllies President Andrew Slavitt.

For HealthAllies, the deal brings the company the ability to develop a suite of ancillary benefits, more flexible benefit designs and insured products and institute better control over its provider network. "I anticipate ... [that] the merger and other trends will cause more growth in '04," Slavitt says.

Call HealthAllies at (877) 426-2559.

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