A.M. Best Lowers Ratings of Two Maxicare HMO's.

OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 12, 1998--A.M. Best Co. has lowered the "B++" (Very Good) ratings of two Maxicare health maintenance organizations, Maxicare North Carolina, Charlotte, N.C. and Maxicare Health Plans of the Midwest, Chicago, to "B+" (Very Good).

The rating change of Maxicare Health Plans of the Midwest reflects its sale to First American Group of Cos. Inc., Matteson, Ill. Previously, the rating reflected the support the HMO received from the stronger California plan-Maxicare of California. Separately, the lowering of Maxicare of North Carolina's rating reflects the difficulties that the North Carolina plan has experienced in its local market, after exiting its commercial, preferred-provider and point-of-service product lines of business.

In December 1997, the Maxicare organization began a comprehensive restructuring, with the intent of focusing its core operations in California, Indiana and Louisiana. These markets have generated substantially all of the membership growth and profits in recent years. The restructuring culminated in the sale of Maxicare Insurance Co., (the company's Wisconsin operation) to Managed Health Services Insurance Corp. (a wholly owned subsidiary of Centene Corp., Milwaukee) and Maxicare Health Plans of the Midwest to First American Group of Cos. Maxicare also intends to exit certain product lines in the Carolina's.

A.M. Best expects that Maxicare will now focus on its remaining markets in California, Indiana and Louisiana and should be able to develop profitable expansion within these markets.

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