A.M. Best Downgrades and Assigns Ratings to Community Health Plan; Revises Outlook to Negative.

OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating (FSR) to C++ (Marginal) from B (Fair) and assigned issuer credit ratings (ICR) of "b+" to Community Health Plan (CHP) and its subsidiary, Community Health Plan Insurance Company (CHPIC). The FSR has been removed from under review with negative implications, and a negative outlook has been assigned to both the FSR and ICR. All companies are domiciled in St. Joseph, MO.

The rating downgrade reflects significant underwriting losses in 2006 due to several unanticipated high cost claims and adverse selection of the health maintenance organization (HMO) product line, which deteriorated the capital position of the health plan. Furthermore, capital and surplus, which has historically been thin, consists mainly of interest that was accrued on a surplus note that was forgiven by the parent, Heartland Health, in a prior year, and unaffiliated equity investments.

The outlook reflects continued pressure on the ratings, owing to underwriting losses that are projected to continue and the plan's inability to profitably grow membership over the past several years, due to the loss of several large employer group segments. Additionally, Heartland Health is not expected to infuse capital over the minimum level required by Missouri, which A.M. Best considers weak for the revised rating.

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

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.