A.M. Best Upgrades Rating of Providence Health Plan; Revises Outlook to Stable.

OLDWICK, N.J. -- A.M. Best Co. has upgraded the financial strength rating to A- (Excellent) from B++ (Very Good) of Providence Health Plan (PHP) (Beaverton, OR). The rating outlook is revised to stable from positive.

The upgrade reflects PHP's continued successful profitable operations, which have a long historical trend of positive operating margins. The successful repositioning of PHP, along with effective pricing and medical cost management practices, has most recently fueled strong operating margins. Membership growth has also been consistent especially in the commercial line of business. This has been accomplished in a strong, competitive environment mainly in the Portland-Metro service area in Oregon.

PHP has excellent capital strength that has been built almost entirely with retained earnings accumulated through recent years of operating profitability, reaching a solid level with a risk based capital authorized control level (RBC ACL) exceeding 800%. A.M. Best believes the capital strength will support future membership growth for PHP through either geographical or product line expansion. The upgrade also reflects continued support by the parent, Providence Health System-Oregon, a financially strong, not-for-profit health delivery organization, through which PHP has a strategic role as the managed care affiliate.

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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 http://www.ambest.com.