Weiss Ratings


HMOs Earn $7 Billion in First Half of 2005

JUPITER, Fla., January 30, 2006 — The nation's HMOs1 reported a $6.98 billion profit for the first six months of 2005, representing a $1.2 billion, or 21.2 percent, increase over the $5.76 billion earned during the same period in 2004, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.

HMOs reporting the largest year-over-year dollar increases in net income include:

Company Headquarters Weiss
Safety
Rating
Net Income (Loss)
2nd Qtr
2005
($Mil)
2nd Qtr
2004
($Mil)
$
Change
%
Change
Horizon Healthcare Services, Inc. Newark, N.J. A 137.0 37.8 99.2 262.7
Oxford Health Insurance, Inc. New York, N.Y. B 98.1 44.5 53.6 120.6
Capital Advantage Insurance Co. Harrisburg, Pa. C 32.3 (12.9) 45.3 348.3
Blue Cross Blue Shield of Michigan Detroit, Mich. A- 208.5 163.4 45.1 27.6
Aetna Health Inc. (a New York Corp.) Uniondale, N.Y. B 76.6 41.7 34.9 83.8

Weiss Safety Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak; F=Failed; U=Unrated

"Despite a slowdown in earnings growth, industry profitability remains strong," said Melissa Gannon, vice president of Weiss Ratings, Inc. "With premium rate increases leveling off, insurers will look for more innovative cost control measures to remain competitive and financially secure."

Notable Upgrades and Downgrades

Of the 503 HMOs reviewed by Weiss using second quarter 2005 data, 76 were upgraded, while 12 were downgraded. Notable upgrades were:

Community Insurance Co. (Mason, Ohio) from B+ to A-
Mercy Health Plans of Missouri Inc. (Chesterfield, Mo.) from B+ to A-
Total Health Care Inc. (Detroit, Mich.) from C+ to B-
Notable downgrades include:
Health First Health Plans (Rockledge, Fla.) from C+ to C-
UPMC Health Plan Inc. (Pittsburgh, Pa.) from B- to C
SHA LLC (Austin, Texas) from C- to D+

The Weiss Safety Ratings are based on an analysis of a company's risk-adjusted capital, five-year historical profitability, quality of investments, liquidity, and stability. The latter category combines a series of factors including asset growth, premium growth, strength of affiliate companies, and risk diversification.

Weiss Ratings, Inc. reviews more than 8,000 stocks daily, including all those traded on the New York Stock Exchange, the American Stock Exchange, and Nasdaq. Weiss also issues investment ratings on more than 12,000 mutual funds, covering equity, fixed-income, and closed-end funds, and provides financial risk ratings on more than 15,000 financial institutions, including banks and insurance companies. It is the only major rating agency that receives no direct or indirect compensation from the companies it rates. Ratings and analyses are available through www.weissratings.com or by calling 800-289-9222.

1Analysis based on insurers that filed a NAIC Health Statement or a California Health Care Service Plan statement. Other insurers offer health insurance but are not included in this analysis. Please refer to Weiss Ratings' Life & Health releases for additional health insurance studies and/or companies at www.WeissRatings.com.

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