A.M. Best Affirms All Ratings of Blue Cross & Blue Shield of Florida's Subsidiaries.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the debt rating of "bbb+" for the $150 million 8.25% surplus notes due 2011 of Blue Cross and Blue Shield of Florida, Inc. (BCBSFL) (Jacksonville, FL), a subsidiary of Blue Cross & Blue Shield of Florida (Florida). A.M. Best has also affirmed the financial strength ratings of BCBSFL and its life/health affiliates. Additionally, A.M. Best has affirmed the issuer credit rating of "a" for BCBSFL. All ratings have a stable outlook. (See listing below.)

The affirmation of the ratings reflects BCBSFL's strong brand image and strong operating performance. The organization's business diversification strategy and strong overall liquidity measures adds stability to its ability to service outstanding debt. BCBSFL also maintains a favorable coverage ratio.

In Florida, the Blue Cross and Blue Shield brand continues to dominate the marketplace in terms of recognition and affinity through BCBSFL's historical focus and commitment to each of the varied economic and social sectors highlighting effective public policy in the state. BCBSFL's operating performance has achieved record levels the last few years, reflecting the population growth and corresponding economic development in Florida, elevated proficiency from many years of technological investment and the organization's undisputed dominance in non-urban markets.

BCBSFL has moderated price increases in certain markets, in order to ameliorate the pressure of employee benefit packages from its most vulnerable customers, has added more flexibility in product choices, including Health Savings Accounts and is working to simplify certain plan designs. A strong capital position, coupled with this approach is likely to cause slight erosion in operating margins over the next few years.

BCBSFL continues to work towards a definitive agreement between its subsidiary, Florida Combined Life Insurance Company (Jacksonville, FL) and USAble Life, a subsidiary of Arkansas Blue Cross and Blue Shield (both of Little Rock, AR). If successful, the combining of select services of both companies could have a positive impact on their parents' competitiveness in non-medical product lines in the region. If this transaction is completed, A.M. Best will re-evaluate the financial strength rating of Florida Combined Life.

The following debt rating has been affirmed with a stable outlook:

Blue Cross & Blue Shield of Florida, Inc.--

--"bbb+' on $150 million 8.25% surplus notes due 2011

The financial strength rating of A (Excellent) has been affirmed with a stable outlook for the following subsidiaries of Blue Cross & Blue Shield of Florida:

--Blue Cross and Blue Shield of Florida, Inc.

--Health Options, Inc.

--Florida Combined Life Insurance Company

The financial strength rating of A- (Excellent) has been affirmed with a stable outlook for Capital Health Plan, Inc., a subsidiary of Blue Cross & Blue Shield of Florida.

The issuer credit rating of "a" has been affirmed with a stable outlook for Blue Cross and Blue Shield of Florida, Inc.

For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.

For current Best's Ratings, independent data and analysis on more than 1,050 health companies and more than 130 HMO industry composites, please visit http://www.ambest.com/health/.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.