A.M. Best Affirms Ratings of Health Care Service Corporation.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A+ (Superior) of Health Care Service Corporation, a Mutual Legal Reserve Company (d/b/a Blue Cross Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. of Illinois/Texas/New Mexico/Oklahoma) (HCSC HCSC Higher Command and Staff Course (educational Course run at the Joint Services Command & Staff College, Shrivenham, UK) HCSC Here Comes Santa Claus ) (Chicago, IL) and select affiliates. A.M. Best has also affirmed the FSRs of A (Excellent) of the remaining HCSC affiliates. Additionally, A.M. Best has affirmed HCSC's issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "aa-" and its debt rating of "a+" on $400 million 7.75% senior unsecured notes, due 2011. The outlook for all ratings is stable. (See below for a detailed list of the ratings.) The health insurance operations of HCSC, as well as its HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, subsidiaries and lines of business, have an established market presence in their respective markets. Market shares reported for Illinois, Texas, New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). and Oklahoma are 43%, 26%, 30% and 22%, respectively. A diverse product portfolio designed to meet the needs of individuals and large, medium and small employer groups employer group Association of employers Managed care An entity with a current group benefits agreement in effect with a health plan to provide covered health care services to its employee-subscribers and eligible dependents. has contributed to the strong market share. Additionally, HCSC has a growing business of life product offerings through its subsidiaries that are licensed in 49 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . Regional diversity minimizes geographic and regulatory risk. Net income has exceeded $300 million for the past five years, excluding a one-time charge in 2002 and was more than $900 million for the past two years. HCSC is well capitalized. Historically strong earnings have contributed significantly to consistent surplus growth and to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. capital adequacy on a risk-adjusted basis. HCSC's debt-to-capital ratio was under 10% at year-end 2005 and is considered below industry average. Debt service coverage was strong at more than 40 times at year-end 2005. Offsetting these strengths are growth challenges in the small group markets, notably in the New Mexico plan. This market is extremely competitive with HMOs owned by medical delivery systems as the major competitors. A.M. Best expects the growth of the New Mexico segment to remain challenged in the near term due to competitive pressures. However, A.M. Best recognizes that the New Mexico segment represents only 2% of HCSC's net premium written and membership. Also, competitors, especially national plans, have built up enough scale to competitively price themselves against the BlueCard program in each of HCSC's operating regions. The FSRs of A+ (Superior) have been affirmed for Health Care Service Corporation and its following affiliates: --Fort Dearborn Life Insurance Company --HMOs of Blue Cross Blue Shield of Illinois --Health Care Service Corporation HMO-Texas The FSRs of A (Excellent) have been affirmed for the following affiliates of Health Care Service Corporation: --Colorado Bankers Life Insurance Company --Member Service Life Insurance Company --GHS Health Maintenance Organization --HMO New Mexico The ICR of "aa-" has been affirmed for Health Care Service Corporation. The following debt rating has been affirmed: Health Care Service Corporation-- --"a+" on $400 million 7.75% senior unsecured notes, due 2011 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 www.ambest.com. |
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