A.M. Best Assigns Rating to MedSpan Health Options and Affirms Rating on Oxford Health Plans Other Subsidiaries.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--May 9, 2002 A.M. Best Co. has assigned a financial strength rating of B++ (Very Good) to MedSpan Health Options, Inc., Hartford, Connecticut “Hartford” redirects here. For other uses, see Hartford (disambiguation). Hartford is the capital of the State of Connecticut. It is located in Hartford County on the Connecticut River, north of the center of the state. , and has affirmed the financial strength rating of A- (Excellent) for the other subsidiaries of Oxford Health Plans, Inc. (NYSE NYSE See: New York Stock Exchange : OHP OHP Oregon Health Plan OHP Overhead Projector OHP Observatoire de Haute-Provence (French observatory) OHP Office of Historic Preservation OHP Oral History Project OHP Occupational Health Psychology OHP Oxford Health Plans Inc. ), Trumbull, Connecticut Trumbull is a town in Fairfield County, Connecticut, United States. The population was 34,243 at the 2000 census. History The English settled Stratford, Connecticut in 1639 and extended their land claims inland to include the northern parts of present-day Trumbull in . The rating outlook for both is stable. The assignment of the rating for MedSpan reflects the strength of its parent, Oxford, and the strategic role MedSpan plays within the Oxford organization. Offsetting factors include the historically poor financial performance of MedSpan and Oxford's integration of the MedSpan business. Oxford has a very solid provider network covering Fairfield County, Connecticut Fairfield County is located in the southwestern corner of the U.S. state of Connecticut. Its population according to the 2000 census was 882,567, but a 2006 survey put the population at 905,000. It is the most populous county in the State of Connecticut. , while MedSpan's provider network is very strong in Hartford County, Connecticut Hartford County is located in the north central part of the U.S. state of Connecticut. As of 2000 the population was 857,183. The population estimate for 2005 was 877,393. In Connecticut there is no county government; the counties determine court boundaries, but little else. . The combination of the two should provide a strong network in the western part of Connecticut and allow both to cover employers who have employees residing in both counties. Unfortunately, MedSpan has reported underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and net losses in three of the past five years. The repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing of the MedSpan business along with improved administrative efficiencies--after integration of its administration into Oxford--should improve its financial results. Additionally, MedSpan exited Medicare+CHOICE effective January 1, 2002, which should eliminate a drag on Verb 1. drag on - last unnecessarily long drag out last, endure - persist for a specified period of time; "The bad weather lasted for three days" 2. earnings. However, the increase in pricing, combined with converting the MedSpan business to Oxford's systems, may result in membership reductions. While A.M. Best expects the impact on MedSpan's in-force membership block of business to be minimal, the final outcome is not yet known. The rating affirmation of the other Oxford subsidiaries reflect their continued trend of favorable earnings, strong market presence in the New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. metropolitan market and brand name recognition. Offsetting factors include concentration in a narrow geographic market and the challenges faced in this highly competitive market. Oxford, with over 1.5 million members, is one of the leading health insurers in the New York City metropolitan area. Furthermore, the Oxford brand name recognition and its long-standing provider relationships have enabled it to maintain its membership through the troubled 1997 and 1998 years and restore profitability thereafter. Since 1999, the company has experienced strong earnings growth with a net income of $322.4 million in 2001, up considerably from $191.3 million in 2000. Oxford's combined administrative expense and medical loss ratio, currently in the 90% range, is one of the lowest among its peers. Oxford's concentration in the New York City metropolitan market could limit its prospects for future growth. Nonetheless, A.M. Best acknowledges that Oxford's market share in this region is approximately 10% of 14 million eligible members in company-sponsored plans, thus leaving room for future growth. Oxford's acquisition of MedSpan should bring about some near-term membership growth and provide some geographic diversity. The financial strength rating of A- (Excellent) has been affirmed for the following Oxford subsidiaries: - Oxford Health Plans (NY), Inc. - Oxford Health Plans (NJ), Inc. - Oxford Health Plans (CT), Inc. - Oxford Health Insurance, Inc. 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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