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

Business Wire, August 9, 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 Molina Healthcare, Inc. (Molina) (Long Beach, CA) [NYSE: MOH]. (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.

Molina's HMO ratings reflect its various companies' sufficient level of capitalization, favorable underwriting performance and relatively consistent operating results. Offsetting rating factors include 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 B- (Fair) and an ICR of "bb" has been assigned to Molina Healthcare of Washington, Inc., a subsidiary of Molina Healthcare, Inc.

The FSR has been upgraded to C (Marginal) from C (Marginal) and an ICR of "b" has been assigned to Molina Healthcare New Mexico, a subsidiary of Molina Healthcare, Inc.

The FSR of C (Marginal) has been affirmed and an ICR of "b" has been assigned to Molina Healthcare of Michigan, Inc., a subsidiary of Molina Healthcare, Inc.

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

The FSR has been downgraded to C (Marginal) from C (Marginal) and an ICR of "b-" has been assigned to Molina Healthcare of California, Inc., a subsidiary of Molina Healthcare, Inc.

Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.