A.M. Best Takes Various Rating Actions on HealthSpring, Inc.’s HMO Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has taken various rating actions on the financial strength ratings (FSR) and issuer credit ratings (ICR) of the health maintenance organization (HMO) subsidiaries of HealthSpring, Inc. (HealthSpring) (headquartered in Nashville, TN) [NYSE: HS]. (Please see below for a detailed listing of the companies and ratings.)

The companies’ Best’s public data (pd) ratings reflect a quantitative analysis of the company’s results based on publicly available financial information. This quantitative analysis includes a review of important tests in three categories: balance sheet strength, operating performance and business profile. Best’s pd ratings do not include analysis based on interaction with insurance company management or non-public financial information.

HealthSpring’s HMO pd ratings reflect its various subsidiaries’ favorable operating results and generally adequate level of capitalization. Offsetting rating factors include a deduction in Medicare Advantage service areas in Alabama to 21 counties, which resulted in a slight decline in membership, and a reliance on government-sponsored programs, which A.M. Best believes could pose future profitability challenges for the organization should reimbursement rates be cut.

The FSR of C++ pd (Marginal) and ICR of “b pd” have been affirmed for Texas HealthSpring LLC, a subsidiary of HealthSpring, Inc.

The FSR has been downgraded to C++ pd (Marginal) from B- pd (Fair) and the ICR to “b pd” from “bb- pd” for HealthSpring of Alabama, Inc., a subsidiary of HealthSpring, Inc.

The FSR of C+ pd (Marginal) and ICR of “b- pd” have been affirmed for HealthSpring of Tennessee, Inc., a subsidiary of HealthSpring, Inc.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.