A.M. Best Rating On Health Care Service Corp. Not Affected by $144 Million Settlement.OLDWICK, N.J.--(BUSINESS WIRE)--July 20, 1998--The "A+" (Superior) rating on Health Care Service Corp. -- also known as 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 Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. -- is not affected by its $144 million settlement with the federal government, A.M. Best Co. said today. A.M. Best considers the company's remaining surplus level to be very strong; therefore, the security of its members is not jeopardized by the settlement. In addition, the historically low earnings margin derived from its role as a Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. intermediary Intermediary See: Financial intermediary intermediary See financial intermediary. have contributed little to overall profitability. Future earnings performance will continue to be a function more of its managed-care initiatives than of its traditional role of claims processor for government and private contracts. However, A.M. Best also recognizes the potential for Health Care Service Corp.'s near-term near-term adj. Of, for, or involving a short period of time in the near future. loss of credibility in its existing markets, diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. provider leverage and the possible difficulties ahead in pursuing its strategic initiatives of diversifying and expanding the company's market opportunities to position itself as a competitive regional health-care player. A.M. Best will continue, through its normal course of review, to evaluate the company's financial strength, market profile and operating performance. 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.
CONTACT: AM Best
Jeffrey Dunsavage
(908) 439-2200, ext. 5618
dunsavj@ambest.com
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