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

Business Wire, August 22, 2007

OLDWICK, N.J. -- 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) (Nashville, TN) (NYSE: HS). (Please see below for a detailed listing of the companies and ratings.)

These ratings are based solely upon public information and present the most informed view A.M. Best can offer, short of an insurer participating in the full interactive rating process. A.M. Best uses the same rating scale and definitions as it does for its long-term financial strength interactive ratings but applies a pd modifier to ensure the user is aware of the more limited information basis for the rating.

HealthSpring's HMO ratings reflect its various subsidiaries' improved earnings and adequate level of capitalization. Offsetting rating factors include significant growth in its core line of business 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 has been upgraded to B- (Fair) from C (Marginal) and an ICR of "bb-" has been assigned to HealthSpring of Alabama, Inc., a subsidiary of HealthSpring, Inc.

The FSR of C (Marginal) has been affirmed and an ICR of "b-" has been assigned to HealthSpring of Tennessee, Inc., a subsidiary of HealthSpring, Inc.

An FSR of C (Marginal) and an ICR of "b" have been assigned to Texas HealthSpring LLC, 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.