A.M. Best Assigns Rating to Metropolitan Health Plan

Business Wire, June 26, 2006

OLDWICK, N.J. -- A.M. Best Co. has assigned a financial strength rating (FSR) of B (Fair) to Metropolitan Health Plan (MHP) (Minneapolis, MN). The rating has a negative outlook.

The rating of MHP reflects its limited market, financial support given to Hennepin County Practis initiative (a new initiative by Hennepin County to offer billing, administrative services and electronic medical records to health care providers) and unfavorable underwriting results. MHP has a limited market; it is only licensed in select counties in Minnesota with a heavy enrollment concentration in Hennepin County. The financial support for Practis has decreased MHP's capitalization. MHP has reported unfavorable underwriting results for the last two years, which has also contributed to the decreased capitalization. The unfavorable underwriting results are not projected to reoccur in the mid term.

Offsetting rating factors include a long history in public assistance programs, its support by Hennepin County, Minnesota, and its potential for growth. MHP has a long history with public assistance programs beginning in the mid 1980s with Minnesota's mandated managed Medical Assistance program. MHP is financially guaranteed by and can access additional capital if required through Hennepin County. MHP has good growth potential with investments in infrastructure for the Medicare Advantage product both with and without Part D (prescription).

Additionally, MHP is projecting membership growth in its Minnesota senior health options product aimed at dual eligible seniors. MHP is also working to expand services and grow its enrollment within Minnesota.

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