A.M. Best Upgrades Rating of RightCHOICE.Business & Insurance Editors OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 21, 2001 A.M. Best Co. has upgraded the financial strength rating to A- (Excellent) from B++ (Very Good) for the insurance subsidiaries of RightCHOICE Managed Care, Inc. (RightCHOICE) (NYSE NYSE See: New York Stock Exchange :RIT RIT, n See therapy, regenerative injection. ), St. Louis. The affected entities are: Healthy Alliance Life Insurance Company, HealthLink HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, , HMO Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. , Inc. (d/b/a BlueChoice) and RightCHOICE Insurance Company. The rating upgrade is based upon a marked improvement in financial results, an enhanced capital position and the retirement of debt at the company. Since 1998--a year in which the company reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1.7 million--consolidated operating results have been steadily improving. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. has grown rapidly since 1998, with the results for the first nine months of 2001 exceeding the operating results for the full year 2000. This improvement is due to the continual decline in both the medical loss ratio and the general and administrative expense ratio for the past three years. Since December 31, 1998 to September 30, 2001, the medical loss ratio has declined by 350 basis points and the general and administrative expense ratio has improved by 280 basis points. The improvement in the medical loss ratio is a result of pricing discipline, medical cost management initiatives and exiting specific lines of business that were not profitable. Additionally, the organization's data warehouse--with over five years of medical claims history and over eight million claims--enables RightCHOICE to better predict changes in medical trends. The improvement in the general and administrative expense ratio has been the result of enhancement in technology, cost saving initiatives, as well as increased premiums which helped to lower the ratio. The enhanced operating performance has led to an increase in capital at the consolidated organization. The quality of capital improved further in May 2001, when RightCHOICE issued additional stock to retire debt, and the Missouri Foundation for Health reduced its ownership stake from 80% to 57%, through a secondary offering of its shares. A.M. Best believes RightCHOICE's corporate discipline should allow it to continue to augment aug·ment v. aug·ment·ed, aug·ment·ing, aug·ments v.tr. 1. To make (something already developed or well under way) greater, as in size, extent, or quantity: the medical loss ratio and general and administrative expense ratio further, which should result in continuing improvement in operating results. The rating continues to reflect RightCHOICE's strong presence in the Missouri market. The enterprise offers Blue Cross and Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. branded (blue brand) products in most of Missouri as well as self-funded products in seven states, including Missouri, via its HealthLink subsidairy. The blue brand is well known and highly regarded, nationally and locally. HealthLink is a well-recognized Preferred Provider Organization pre·ferred provider organization n. Abbr. PPO A medical insurance plan in which members receive more coverage if they choose health care providers approved by or affiliated with the plan. (PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there ), that is not blue branded. The HealthLink line of products allows the organization to sell in areas in which RightCHOICE does not have the Blue Cross license. The combination of brands and product offerings has allowed the consolidated organization to achieve a statewide market share in excess of 30% in Missouri. Moreover, the HealthLink products allow the company to expand outside of Missouri. Offsetting these strengths is the highly competitive healthcare market in which the consolidated organization operates, particularly in the metropolitan areas of Missouri. 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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