How Healthy Is Your Insurer?

After years of raising premiums to meet rising medical cost trends and expanding coverage through acquisitions and mergers, health insurers are seeking new ways to maintain profitability going forward.

They are using their improved financial condition to spend more on technology and expand into new products such as high-deductible health plans and Medicare prescription drug coverage, while also expanding their low-risk administrative-service-only line of business.

Many of the largest managed care organizations in the country, which as a group have over 48 million members, are rated in the top two ranges of the scale -- A and B.

The health insurance industry is dominated by a few large national players including UnitedHealth Group (UNH Quote), Wellpoint(WLP Quote), Kaiser , Aetna(AET Quote), HCSC (which does business under several Blue names) and Humana(HUM Quote).

Below is the list of the largest, on the basis of 2005 health premiums, that received A or B ratings. Included on this list are four United HealthCare insurance operating entities. TheStreet.com issues ratings on 57 of the UNH insurance subsidiaries for a composite rating, based on a weighted average of assets and rating, of B.

The good rating reflects the insurance group's strong capitalization and profitability while also recognizing the challenges that incorporating and leveraging acquisitions into operations, including the Pacificare and Oxford companies, can have on the financial strength of the group.

Six Wellpoint insurance operating entities make the list below, while on a group basis the 33 rated entities combine for a composite rating of A-minus. Wellpoint does business under the Blue Cross Blue Shield, Anthem and Unicare names, among others, and is led by the Blue Cross of California entity with an A-plus rating that covers 4.5 million members.

The Largest Top-Rated Health Insurance Companies Premiums culled from statutory filings
Company	Group	Annual Health Premiums (billions)	Members (millions)	Financial Safety Rating
Kaiser Foundation Health Plan (CA)	Kaiser Foundation	$29.20	6.7	B+
United Healthcare Insurance Company (CT)	UnitedHealth Group (UNH)	$17.90	Not Available	B
Health Care Svc Corp (IL)*	HCSC Group	$11.70	4.5	A+
Blue Cross of California (CA)	Wellpoint (WLP)	$11.10	4.5	A+
California Physicians Service (CA)	Blue Shield of California	$7.20	2.6	A
Pacificare of California (CA)	UnitedHealth Group (UNH)	$6.60	1.7	B+
Health Net (CA)	Health Net (HNT)	$6.30	2.2	B+
Blue Cross Blue Shield of Michigan (MI)		$5.50	2.6	A
Excellus Health Plan (NY)	Lifetime Healthcare	$4.40	1.9	A+
Highmark (PA)		$4.20	2.6	B
Blue Cross Blue Shield of Florida (FL)		$4.00	1.5	B+
Empire Healthchoice Assurance (NY)	Wellpoint (WLP)	$3.70	2.6	A
Horizon Healthcare Services (NJ) (dba Horizon Blue Cross Blue Shield of New Jersey)		$3.60	1.6	A+
Blue Cross & Blue Shield MA HMO Blue (MA)	Blue Cross & Blue Shield Massachusetts	$3.60	1	A
Community Ins Co (OH)	Wellpoint (WLP)	$3.60	1.7	A-
Health Insurance Plan of Greater NY (NY)	HIP Holdings	$3.60	1	A
Keystone Health Plan East (PA)	Independence Blue Cross	$3.30	0.9	B+
Anthem Health Plans of Virginia (VA)	Wellpoint (WLP)	$3.30	1.1	A-
Blue Cross Blue Shield of Alabama		$3.10	1.7	A
Humana Medical Plan (FL)	Humana (HUM)	$3.00	0.5	B
Anthem Health Plans (CT)	Wellpoint (WLP)	$2.90	0.9	B+
Oxford Health Plans (NY)	UnitedHealth Group (UNH)	$2.80	0.5	A+
Oxford Health Ins (NY)	UnitedHealth Group (UNH)	$2.60	1.2	B+
Blue Cross Blue Shield of Georgia	Wellpoint (WLP)	$2.50	0.8	A+
Aetna Health (A New Jersey Corp)	Aetna (AET)	$2.40	0.6	B+
* Does business as Blue Cross Blue Shield of Oklahoma, Blue Cross Blue Shield of Illinois, Blue Cross Blue Shield of Texas and Blue Cross Blue Shield of New Mexico.