A.M. Best Assigns Ratings to MHealth Insurance Company Business Wire OLDWICK, N.J. -- November 30, 2012 A.M. Best Co. has assigned a financial strength rating of B (Fair) and an issuer credit rating of “bb+” to MHealth Insurance Company (MHealth) (Houston, TX). The outlook assigned to both ratings is stable. The ratings recognize the strategic role MHealth plays and the explicit support it receives from its ultimate parent, Memorial Hermann Healthcare System. The parent company has demonstrated explicit financial support through capital contributions and the implementation of a risk-based capital support guarantee in the latter part of 2012. The ratings also reflect MHealth’s strong risk-adjusted capital levels and its very conservative investment portfolio. Offsetting these positive rating factors are MHealth’s continued but improved operating losses through 2012, which are projected to continue through year-end 2013. Additionally, the company has a limited service area, coupled with some concentration in small group business. A.M. Best believes the small group business could be negatively impacted by healthcare reform and the setup of exchanges, with MHealth potentially losing some business at a time when it is trying to grow. However, the management at MHealth feels that healthcare reform could have a positive impact based on its integrated approach and the potential to offer competitively priced narrow network products and customer friendly plan designs in a business-to-consumer marketplace. A.M. Best will continue to monitor what the ultimate impact will be of these federal regulatory changes on the plans business model, production and profitability going forward. The outlook is based on the organization’s ability to maintain its underwriting operating results and eventually produce favorable premium growth trends and operating results in the near term. On September 2011, MHealth (formerly known as UNICARE Health Insurance Company of Texas) was sold by WellPoint Inc. to MHealth, Inc., and subsequently, its name was changed to MHealth Insurance Company. Prior to the change in ownership, UNICARE Health Insurance Company of Texas primarily wrote Medicare supplement policies. This business was reinsured back to a subsidiary within WellPoint Inc., and MHealth assumed a smaller amount of the commercial individual and group accident and health business it was previously writing through a fronting company. Positive rating actions could occur if MHealth records favorable membership, premium and underwriting/operating results, leading to organic capital expansion. However, the ratings could be negatively impacted by significant deterioration in the company’s operating performance and/or risk-adjusted capitalization, a reduction in or stoppage of financial support from the parent or a substantive impact of the regulatory environment relating to healthcare delivery mandates and reform measures. The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED. Contact: A.M. Best Company Jennifer Afriyie, 908-439-2200, ext. 5203 Financial Analyst firstname.lastname@example.org or Rachelle Morrow, 908-439-2200, ext. 5378 Senior Manager, Public Relations email@example.com or Joseph Zazzera, MBA, 908-439-2200, ext. 5797 Assistant Vice President firstname.lastname@example.org or Jim Peavy, 908-439-2200, ext. 5644 Assistant Vice President, Public Relations email@example.com
A.M. Best Assigns Ratings to MHealth Insurance Company
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