PACIFICARE: A.M. BEST LOWERS COMPANY’S RATINGS
"PacifiCare of California Inc. had its Best's Rating of 'A+'This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
(Superior) lowered to 'A' (Excellent)," BestWeek reports. Best
Week cited several reasons for the rating downgrade, including
"the competitive nature of the California market, which accounts
for about two-thirds of the membership of PacifiCare's parent
organization -- PacifiCare Health Systems -- and an even more
significant portion of the overall earnings." The downgrade also
reflects difficulties PacifiCare has had integrating FHP
International Corp., including "high financial leverage resulting
from [the FHP acquisition] and increasing competitive pressures
on margins for the organization's Medicare risk business." A.M.
Best also lowered the ratings of two other PacifiCare regional
health systems. PacifiCare of Washington and PacifiCare of
Oregon had their ratings lowered from "A" to "A-." However, the
news was not all bad for PacifiCare. PacifiCare/FHP of Texas had
its ratings upgraded from "B+" (Very Good) to "A" (BestWeek, 7/14
issue).