Moody’s Investors Service, New York, has downgraded Health Net Inc.[@@]
The rating agency has lowered the rating it has placed on the Woodland Hills, Calif., company’s senior unsecured debt to Ba2 with a negative outlook, from Ba1.
Moody’s is cutting Health Net’s ratings in part because of concerns about unexpected decreases in enrollment and Health Net’s plans to increase Medicare membership.
Health Net, a company that provides or administers health coverage for 6.5 million people, had risk-based capital that was only 110% of the company action level Dec. 31, 2004, and that figure was lower than Moody’s had estimated, Moody’s says in a comment on the rating change.
The RBC level also was down from 165% of the company action level a year earlier, Moody’s says.
Health Net faces no immediate threat of regulatory action because it is meeting all state requirements, but its commercial membership was down 3.3% in March, and the drop was larger than the company had predicted, Moody’s says.