NU Online News Service, Nov. 2, 2004, 5:46 p.m. EST

A rating agency says a California managed care company is facing fierce competition away from its home state.[@@]

Standard & Poor’s ratings Services, New York, has lowered its credit rating on Health Net Inc., Los Angeles, to BB plus, from BBB minus.

Health Net is having a hard time competing in the Northeast, and S&P now believes that only Health Net’s California health plan operations are core Health Net health plan operations, according to a comment on the rating change released by S&P credit analysts.

But Health Net does have well-established operations in California and a profitable government contracts unit, the S&P analysts write.

Health Net provides or administers medical coverage for about 3.8 million people.