FOR IMMEDIATE RELEASE                                          AT
FRIDAY, SEPTEMBER 29, 1995                         (202) 616-2771
                                               TDD (202) 514-1888


      JUSTICE DEPARTMENT INVESTIGATION OF HEALTH CARE MERGER
                 CONCLUDES WITH RESTRUCTURED DEAL

     WASHINGTON, D.C. -- The Department of Justice's Antitrust
Division announced today that it will conclude its investigation
of United HealthCare's $1.65 billion purchase of MetraHealth
Companies, if the companies complete plans to sell MetraHealth's
health maintenance organization serving the greater St. Louis
metropolitan area.
     The Department had investigated the transaction to determine
if the deal as originally proposed could reduce competition in
the sale of managed health care plans nationally, or in any area
that the two firms both served.  The investigation ultimately
focused on the St. Louis area, following an examination of many
other areas, the Department said. 
     Anne K. Bingaman, Assistant Attorney General in charge of
the Antitrust Division, said, "Preserving and protecting
competition is especially important as part of the overall effort
to reduce the cost of health care to American businesses and
consumers."  Bingaman said the transaction as originally
structured raised questions about the possible loss of
competition in the sale of managed health care plans in the St.
Louis area.
     Both United HealthCare and MetraHealth sell managed care
services and other health insurance products, including health
maintenance organizations and preferred provider organizations. 
     Missouri insurance officials also investigated the proposed
transaction and held hearings on September 14 and 15 of this
year.  Missouri officials and the parties subsequently entered
into an agreement that resulted in the issuance of an order
requiring the divestiture of MetraHealth's St. Louis subsidiary
to an approved purchaser within a short period of time.  
     The order also contains provisions to ensure that the
subsidiary is held and operated separately from United's other
St. Louis business, pending its sale to an approved purchaser.
     The Antitrust Division cooperated closely with Missouri
officials during the investigation.
      Bingaman said that the order issued by the Missouri
Department of Insurance and the contemplated spin-off resolve the
Division's competitive questions.  
     United HealthCare, headquartered in Minnetonka, Minnesota,
is one of the nation's largest and most experienced operators of
various types of health care plans, including health maintenance
organizations, point of service plans and preferred provider
organizations.  It had 1994 revenues of approximately $3.8
billion.
      MetraHealth, headquartered in Greenwich, Connecticut, is a
joint-venture company formed by Metropolitan Life and the
Travelers Insurance Companies to combine their health care
businesses.   Although MetraHealth is heavily involved in
traditional indemnity health insurance, it also offers managed
health care plans.  MetraHealth had 1994 revenues of
approximately $5.2 billion.
                               ###
95-521