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CREDIT FOCUS

INSURANCE
JULY 31, 2014




RATINGS
Aetna Inc.
Senior Unsecured Debt Baa2
Insurance Financial Strength (IFS)* A2
Rating Outlook Stable
Cigna Corporation
Senior Unsecured Debt Baa2
Insurance Financial Strength (IFS)* A2
Rating Outlook Positive
Humana Inc.
Senior Unsecured Debt Baa3
Insurance Financial Strength (IFS)* A3
Rating Outlook Stable
UnitedHealth Group Inc.
Senior Unsecured Debt A3
Insurance Financial Strength (IFS)* A1
Rating Outlook Stable
WellPoint, Inc.
Senior Unsecured Debt Baa2
Insurance Financial Strength (IFS)* A2
Rating Outlook Stable
* IFS rating on domestic operating companies
Key Indicators continued on page 13

Analyst Contacts:
NEW YORK +1.212.553.1653
Stephen Zaharuk +1.212.553.1634
Senior Vice President
stephen.zaharuk@moodys.com
Ellen Fagin +1.212.553.1650
Associate Analyst
ellen.fagin@moodys.com
Robert Riegel +1.212.553.4663
Managing Director - Insurance
robert.riegel@moodys.com

Medicare Advantage Cuts: Prognosis Not Bad
For Most Health Insurers

Summary Opinion
With continued pressure on Medicare Advantage (MA) reimbursements to health insurers,
there will likely be credit implications in terms of membership growth and income. In this
report, we compare the expected impact on five large national health insurers of a no-growth
membership and reduced margin scenario over a one-year and three-year horizon, focusing on
their MA revenue and earnings. Our key findings are:
Although not insignificant, the MA exposure for four of the largest health insurers -
UnitedHealth, Aetna, WellPoint, and Cigna - is manageable given these companies
overall diversification. However, Humana, with a much larger MA exposure, would
appear to be vulnerable to experiencing a larger negative financial impact from
continued reimbursement reductions.
Despite the reimbursement rate changes mandated by the Affordable Care Act and other
reductions being proposed by the Centers for Medicare and Medicaid Services, we
believe that in the near term the product is sustainable although with lower membership
growth rates than experienced over the last several years. In addition, it is likely that pre-
tax margin will be somewhat lower that the current 4% range.
Given their track record and our expectation of health insurers adaptability, the scenario
we have used to gauge the credit rating sensitivity for each insurer to the MA product
segment - a pretax margin of 2.5% to 3% and no membership growth - is a bit severe,
especially over a three year horizon.
Nevertheless, under this scenario, our analysis finds that for all five health insurers, there
is no significant credit deterioration after one year.
However, reflecting the higher revenue and income exposure Humana has to this
product, our analysis indicates a negative impact to Humanas overall credit profile
under the unlikely event the scenario assumptions continue for a three-year time horizon
and Humana is unable to grow its other business segments.





INSURANCE
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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
The Current State of Medicare Advantage Reimbursements
Insurers demonstrate resiliency to cuts
MA reimbursement rates to insurance companies have been reduced over the last several years as a
result of a combination of lower MA benchmark rates established by the Centers for Medicare and
Medicaid Services (CMS), reductions mandated in the Affordable Care Act (ACA), and sequestration
1
.
Under the ACA, federal payments to MA plans are scheduled to decrease over time, bringing them
closer to parity with traditional Medicare fee-for-service program costs. The recently released CMS
2015 MA benchmark rates reflect further reductions to MA payments. As shown in the table below,
the compounded reduction in reimbursement rates over the last several years projected through 2015
is over 23%, after factoring in the impact of medical inflation.
EXHIBIT 1
Medicare Advantage Change in Reimbursement Rate

Change in Reimbursement
Level
Annual Increase in Medicare
Expenditures
1

Projected Future Annual
Increase in Medicare
Expenditures
Compounded Net
Reimbursement Change
2010 -5.0% 1.3% -6.3%
2011 -1.6% 2.4% -10.0%
2012 -1.5% 0.7% -12.0%
2013 -0.9% 1.5% -14.1%
2014 -4.7% 1.5% -19.5%
2015 -3.8% 1.5% -23.7%
1
Source: Centers for Medicare & Medicaid Services (CMS)

As an additional challenge to these reimbursement reductions, insurers need to incorporate into their
premiums the impact of the ACA Industry Tax
2
. This surcharge became effective in 2014 and will
continue to increase through 2018, adding approximately 1% each year to premiums.
For the most part, the companies responses to these reductions have been a combination of reduced
benefits and/or higher premiums for seniors, which at some point would likely result in reduced
membership in these products. Additionally, some insurers have exited locations where they did not
believe they could offer a viable and profitable product. Another tactic MA insurers are using to offset
some of the reimbursement reductions is to limit provider choice in their plans. By using these
narrow networks, similar to what weve seen in individual products offered on the ACA healthcare
exchanges, insurers can negotiate deeper discounts from physicians and hospitals in exchange for the
expectation of additional patient volume. However, these more limited networks are not very popular
with seniors or regulators, especially when seniors have been under the care of one physician and
would be required to change doctors if they remained in their MA plan.
Offsetting the reimbursement reductions, health insurers are eligible to have their MA rates enhanced
by CMS quality bonuses based upon specified clinical and operational performance standards
measured through a star rating system. In 2015, quality bonus payments will be paid only to 4, 4.5,

1
Sequestration refers to federal spending cuts beginning in 2013 which were mandated by the Budget Control Act of 2011. As a result, MA plans were impacted with a
2% reduction to the Net Capitation Payment made by the federal government.
2
The Affordable Care Act imposes an annual fee on the health insurance industry of $8 billion in 2014. The fee increases annually to $14.3 billion in 2018 and is indexed
to premium growth rates thereafter. Each healthcare insurers portion of the fee is based on its market share of total insured premiums.
This publication does not announce
a credit rating action. For research
publications that reference Credit
Ratings, please see the ratings tab
on the issuer/entity page on
www.moodys.com for the most
updated Credit Rating Action
information and rating history.



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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
and 5 star rated plans. For 2014, CMS reported that 3% of MA plans were rated 5 stars and 35% had
ratings of 4.5 or 4 stars. Approximately 58% of MA plans were rated 3 or 3.5 stars and received
bonuses in 2014. But, unless these plans are able to increase their rating, they would no longer be
eligible for bonuses in 2015.
However, if the reimbursement rates continue to be meaningfully reduced, we expect that MA plans
would at some point lose their premium/benefit advantage over traditional Medicare plans. In fact, as
the premium/benefit difference between the two plans becomes less significant, we believe the wider
provider choice available in the traditional Medicare plan could tip the scale in favor of the
government plan for seniors, dampening growth in Medicare Advantage. The Congressional Budget
Office had a similar view in 2010, estimating that the MA changes incorporated in the ACA would
result in reduced benefits and lower enrollment in private plans
3
,

estimating that enrollment in MA
plans in 2019 would be 4.8 million lower than previously projected.
Medicare Advantage Exposures for the Five Large National Insurers
Humanas significant MA exposure an outlier
In the current environment, the challenge for insurers is to continue to provide MA products that are
both affordable and attractive to seniors, while still earning a favorable margin. For some insurers, the
issue is more crucial, because MA represents a significant portion of their revenue and earnings profile.
The table below provides reported MA membership for the five largest health insurers along with the
estimated proportion of their total revenue attributable to Medicare Advantage. We have estimated
these percentages based on average premium rates charged to MA members.
EXHIBIT 2
Estimated Percentage of Medicare Advantage Revenue

Insurance Financial Strength (IFS)
Rating and outlook
Medicare Advantage Membership
March 31, 2014
Estimated Percentage of Revenue
Attributable to Medicare
Advantage
UnitedHealth Group A1, stable 2,985,000 25% to 30%
Humana A3, stable 2,808,400 70% to 75%
Aetna A2, stable 1,101,000 20% to 25%
WellPoint A2, stable 538,000 15% to 20%
Cigna A2, positive 458,000 20% to 25%
Source: CMS, Company Filings, and Moody's estimates

Given the limited data available, estimating the percentage of earnings attributable to MA is more
difficult. As expected, MA earnings have fluctuated from year to year because of medical utilization
trends and other marketplace disruptions; therefore, using historical results can be misleading. In our
analysis, we have used as our assumption the marketplace consensus that MA pre-tax earnings margins
are typically targeted in the 4% to 4.5% range. Applying this assumption to our estimated premium
ranges, we have developed a 2014 projected range of target earnings for each company and the
resulting estimated percentage of earnings expected to be attributable to Medicare Advantage.


3
Congressional Budget Office: Comparison of Projected Enrollment in Medicare Advantage Plans and Subsidies for Extra Benefits Not Covered by Medicare Under
Current Law and Under Reconciliation Legislation Combined with H.R. 3950 as Passed by Senate, 19 March 2010.



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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
EXHIBIT 3
Estimated Contribution Of Medicare Advantage Earnings

Projected Range of Annual Medicare Advantage
Pre-tax Earnings ($ billions)
Estimated Percentage of Pre-tax Earnings
Attributable to Medicare Advantage
UnitedHealth Group 1.2 - 1.3 15% to 25%
Humana 1.0 - 1.1 60% to 70%
Aetna 0.4 - 0.5 10% to 20%
WellPoint 0.4 - 0.5 10% to 20%
Cigna 0.2 - 0.3 10% to 20%

Although not insignificant, the earnings risk from MA exposure for UnitedHealth, Aetna, WellPoint,
and Cigna is manageable given these companies overall diversification. Humana, however, clearly has
significant risk exposure to Medicare Advantage, and the recent changes to the reimbursement rates
have a potentially greater impact on the companys financial results.
Medicare Advantage to Remain Viable, with Lower Margins and Slower Growth
While we cannot project the long term durability of the MA product, which is very much subject to
federal fiscal policy and political debate, we believe that in the near term, the product is sustainable,
although it is unlikely that the pre-tax margin can be maintained in the 4% range.
Our rationale for the continued viability of the product, but with slowing growth, is based in part on
the historical growth in MA enrollment as shown in the table below despite the concurrent
reimbursement cuts discussed above.
EXHIBIT 4
National Medicare Advantage Membership Growth by Year

Medicare Advantage Membership
beginning of year Membership Growth Rate Compounded Growth Rate
2009 10,746,489
2010 11,373,044 5.8% 5.8%
2011 12,164,095 7.0% 13.2%
2012 13,315,182 9.5% 23.9%
2013 14,575,311 9.5% 35.6%
2014 15,917,380 9.2% 48.1%
Source: Centers for Medicare & Medicaid Services (CMS)

With CMS reporting MA enrollment of over 16 million seniors, or 30% of all Medicare beneficiaries,
as of 1 June 2014, the popularity of these plans continues to grow.
We believe there are two reasons for this significant historical growth: 1) the senior population
enrolled in these products tends to be sticky, and despite some erosion in benefits over time, many
still favor the MA value proposition over traditional Medicare (paying a fixed co-pay rather than a
variable coinsurance amount) and 2) the senior population currently aging into Medicare is more
familiar and accepting of the HMO/PPO network plan typically offered under Medicare Advantage.
Given the membership growth trend, the potential for enhanced reimbursements under the star bonus



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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
program, and the political clout of the 16 million seniors enrolled in Medicare Advantage, we believe
the product still has some growth potential remaining.
Although we believe MA membership will continue to grow, but at a slower pace, insurers earnings
will likely be pressured in order for companies to retain existing membership and maintain this
growth. In addition, lower membership growth will eventually translate into an older and less healthy
population, with relatively fewer younger, healthy lives enrolling, resulting in higher medical costs and
lower margins over time.
Credit Implications of a Less Robust Medicare Advantage Product: One Scenario
To gauge the credit rating impact of a no-growth MA scenario with reduced margins, we modeled a
potential no growth/reduced margin scenario and ran the results through Moodys Insurance
Scorecard metrics for US Health Insurance Companies
4
over a one-year and three-year time horizon.
This exercise has obvious limitations in that these companies are dynamic and well-diversified, and the
exercise only measures the impact arising from negative developments in one segment of the company
while holding everything else static. Because of insurers demonstrated ability to adapt to MA
reimbursement cuts and given the static nature of the scenario, we believe our scenario is fairly
conservative over a relatively short time horizon. However, the exercise does provide some insight into
the sensitivity of each companys credit profile to the MA segment.
We have made the following assumptions in our scenario:
MA net membership growth: 0% for each of the next three years
Annual MA pre-tax margin: 2.5% to 3.0%
As a starting point, we have used the 2014 earnings guidance provided by each company. We have
assumed the results from other product segments are in line with historical results and there was no
change in the companys capital or debt. Based on this scenario, the key metrics used in the rating
methodology that are impacted are: Organic Membership Growth, Premium and Earnings
Concentration, EBITDA Margin, Debt-to-EBITDA, and EBITDA Interest Coverage. The results
displayed in the Appendix for each of the five health insurers we tested reflect the unadjusted raw
scores obtained from applying the methodology to the metrics using the assumptions listed above, and
do not reflect any analytical adjustments.
In summary, the analysis indicates that for all five health insurers, there is no significant credit
deterioration after one year. After three years, however, there is more significant downward pressure on
the financial profiles of all five companies. Only for the two insurers with the largest MA exposure
(i.e., UnitedHealth and Humana) is there also a negative credit impact on the business profile, as the
no-growth scenario is a sharp departure from the historical growth each company has experienced in
this product.
From an overall credit perspective, only Humanas credit profile is negatively impacted, and only
under the three-year time horizon. This is a reflection of the higher exposure Humana has to this
product from both a revenue and income perspective. We would expect to take rating action if the MA
segment showed signs of potential significant deterioration (e.g., the scenario modeled here) and the
company did not take corrective action.

4
Moodys Rating Methodology for U.S. Health Insurance Companies, May 2011 (133040)



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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
As noted, this analysis does not reflect any change in strategy that these insurers might implement to
focus and grow their other business segments if the MA product came under the pressures tested in our
scenario. We note that all five companies have developed other strong business segments including
commercial, Medicaid, and international.
The Appendix contains the Insurance Scorecard unadjusted results for each company, over both a one-
year and three-year horizon.




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7 JULY 31, 2014

CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
Appendix of Insurance Scorecard Results

Raw Scorecard Results Aetna

Scorecard
2014
Guidance
Impact of
Lower MA
results after
1 year
Impact of
Lower MA
results after
3 years Comments
Business Profile
Market Position and Brand Mid A No change No change Although Aetna's Medicare Advantage business has
been growing, Medicare Advantage membership
represents less than 5% of Aetna's total medical
membership. As a result, the metrics and resulting
scores for these two factors are relatively unchanged.
Product Risk and
Concentration
Weak Aa No change No change
Financial Profile
Capital Adequacy & Quality Weak A No change No change No changes in metrics for this factor
Profitability Strong A No change The lower score after 3 years reflects the impact of
lower Medicare Advantage earnings. The impact,
however, is not significant enough to lower the
overall score for the factor. Since the methodology
uses 3 year average of EBITDA margins, the impact of
lower earnings is lessened in year 1.
Financial Flexibility Weak A While no change in level of debt is assumed, the
lower earnings assumptions for Medicare Advantage
impacts both coverage and earnings leverage metrics;
however, the impact for both time horizons is not
significant enough to change the overall factor score
Composite Score
A2 No change No change Under both time horizons (1 year and 3 years)
Aetna's Business Profile remains unchanged.
However, due to the lower earnings margin
assumed for the Medicare Advantage product,
there is some downward pressure on the Financial
Profile, but it is not significant enough to change
the overall credit score.
Key:
No change Score for factor virtually unchanged - no upward or downward pressure
or Some upward/downward pressure, but not significant enough to change score by one notch.
or Upward/Downward pressure to change by one notch
or More significant upward/downward pressure to change score or rating by more than one notch





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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS

Raw Scorecard Results Cigna

Scorecard
2014
Guidance
Impact of
Lower MA
results after
1 year
Impact of
Lower MA
results after
3 years Comments
Business Profile
Market Position and Brand Strong A No change No change Although Cigna's Medicare Advantage business has
been growing, Medicare Advantage membership
represents less than 5% of Cigna's total medical
membership. As a result the metrics and resulting
scores for these two factors are relatively unchanged.
Product Risk and
Concentration
Weak Aa No change No change
Financial Profile
Capital Adequacy & Quality Weak A No change No change No changes in metrics for this factor
Profitability Strong A No change The lower score after 3 years reflects the impact of
lower Medicare Advantage earnings. However, due to
the strength and diversity of Cigna's other business,
the impact is not significant enough to lower the
factor score. Since the methodology uses 3 year
average of EBITDA margins, the impact of lower
earnings is lessened in year one.
Financial Flexibility Strong Baa No change While no change in level of debt is assumed, the
lower earnings assumptions for Medicare Advantage
impacts both coverage and earnings leverage metrics.
However, in the first year the impact is negligible and
even after year 3, the impact is not significant
enough to change the overall factor score
Composite Score
A2 No change No change Under the no-growth, lower margin Medicare
Advantage scenario, Cigna's Business Profile and
Financial Profile remain unchanged after one year.
However, due to the lower earnings margin
assumed for the Medicare Advantage product,
there is some downward pressure on the Financial
Profile after 3 years, but it is not significant
enough to impact the overall credit score.
Key:
No change Score for factor virtually unchanged - no upward or downward pressure
or Some upward/downward pressure, but not significant enough to change score by one notch.
or Upward/Downward pressure to change by one notch
or More significant upward/downward pressure to change score or rating by more than one notch





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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
Raw Scorecard Results - Humana

Scorecard
2014
Guidance
Impact of
Lower MA
results after
1 year
Impact of
Lower MA
results after
3 years Comments
Business Profile
Market Position and Brand Weak Aa The lower score reflects no growth assumption for
Medicare Advantage membership vs. 13.2% CAGR
Medicare Advantage membership growth over last 5
years
Product Risk and
Concentration
Strong Baa The improved score reflects a lower revenue
concentration in Medicare Advantage, providing
Humana with a more diversified premium
distribution
Financial Profile
Capital Adequacy & Quality Strong Baa No change No change No changes in the metrics for this factor
Profitability Mid-range A No change The score for this factor is impacted both positively
and negatively based on the assumptions made.
Since Medicare Advantage growth is assumed to be
zero, earnings become less concentrated in Medicare
Advantage improving the factor score; however, the
lower margins assumed to be earned in Medicare
Advantage lower the factor score. In the first year the
positive and negative impact cancel each other out
and the score remains unchanged. However, after
three years the more heavily weighted EBITDA metric
has more impact on the overall factor score, resulting
in downward pressure on the overall rating.
Financial Flexibility Strong A While no change in the level of debt is assumed, the
lower earnings assumptions for Medicare Advantage
impact both the earnings coverage and earnings
leverage metrics, lowering the score for this factor.
Since the EBITDA coverage metric is a 3 year
weighted average, the impact is lessened in year one,
but lowers the score by 1 notch after 3 years.
Composite Score
A3 After one year, even though there is downward
pressure on Humana's Business Profile as a result
of the no membership growth assumption, it is
partially offset by the improved revenue
diversification. Overall, the impact in year 1 is not
significant enough to change ratings. However, if
this pattern persisted for three years, continued
pressure on the Business Profile from the no
growth assumption combined with downward
pressure on Humana's Financial Profile as a result
of the assumed lower earnings margins, result in
downward pressure on the overall credit rating of
one notch.
Key:
No change Score for factor virtually unchanged - no upward or downward pressure
or Some upward/downward pressure, but not significant enough to change score by one notch.
or Upward/Downward pressure to change by one notch
or More significant upward/downward pressure to change score or rating by more than one notch




INSURANCE
10 JULY 31, 2014

CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
Raw Scorecard Results UnitedHealth

Scorecard
2014
Guidance
Impact of
Lower MA
results after
1 year
Impact of
Lower MA
results after
3 years Comments
Business Profile
Market Position and Brand Strong Aa No change The lower score after 3 years reflects the no growth
assumption for Medicare Advantage membership vs.
UnitedHealth's 10.8% CAGR Medicare Advantage
membership growth over the last 5 years. There is no
impact in the score after one year as a result of
UnitedHealth's strong diversification and the
methodology employing a 3 year average for the
membership growth metric.
Product Risk and
Concentration
Weak Aa No change No change Despite the no growth assumption for Medicare
Advantage, the change is not sufficient enough to
alter the score for this factor as a result of
UnitedHealth's well diversified revenue streams.
Financial Profile
Capital Adequacy & Quality Strong Baa No change No change No changes in metrics for this factor
Profitability Mid Aa No change As a result of UnitedHealth's strong earnings
diversity and profit margins, the lower earnings
margin assumed for Medicare Advantage only have a
minimal impact to the factor score after 3 years
Financial Flexibility Strong A While no change in the level of debt is assumed, the
lower earnings assumptions for Medicare Advantage
impact both the earnings coverage and earnings
leverage metrics. However, due to UnitedHealth's
overall strong earnings and diversified earnings
profile, the impact to the factor score as a result of
lower earnings in one business segment is minimal.
Composite Score
A1 No change Despite some downward pressure on the Financial
Profile score in the first year, the change is not
significant enough to impact the overall score.
After 3 years, however, the combined effect of no
membership growth and lower margins increase
the downward pressure on the overall score;
however, the impact is less than a notch.
Key:
No change Score for factor virtually unchanged - no upward or downward pressure
or Some upward/downward pressure, but not significant enough to change score by one notch.
or Upward/Downward pressure to change by one notch
or More significant upward/downward pressure to change score or rating by more than one notch






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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
Raw Scorecard Results WellPoint

Scorecard
2014
Guidance
Impact of
Lower MA
results after
1 year
Impact of
Lower MA
results after
3 years Comments
Business Profile
Market Position and Brand Weak Aa No change No change Although WellPoint's Medicare Advantage business
has been growing, Medicare Advantage membership
represents less than 5% of WellPoint's total medical
membership. As a result the metrics and resulting
scores for these two factors are relatively unchanged.
Product Risk and
Concentration
Strong A No change No change
Financial Profile
Capital Adequacy & Quality Strong Baa No change No change No changes in metrics for this factor
Profitability Mid A No change The lower score after 3 years reflects the impact of
lower Medicare Advantage earnings. However, due to
the strength and diversity of WellPoint's other
business, the impact is not significant enough to
lower the factor score. Since the methodology uses 3
year average of EBITDA margins, the impact of lower
earnings is lessened in year one.
Financial Flexibility Mid Baa No change While no change in level of debt is assumed, the
lower earnings assumptions for Medicare Advantage
impacts both coverage and earnings leverage metrics.
However, in the first year the impact is negligible and
even after year 3, the impact is not significant
enough to change the overall factor score
Composite Score
A2 No change No change
Under both time horizons (1 year and 3 years)
WellPoint's Business Profile and Financial Profile
scores remain relatively unchanged While there is
some downward pressure on the Financial Profile
after 3 years due to the lower earnings margin
assumed for the Medicare Advantage product, the
impact is not significant enough to change the
overall credit score.

Key:
No change Score for factor virtually unchanged - no upward or downward pressure
or Some upward/downward pressure, but not significant enough to change score by one notch.
or Upward/Downward pressure to change by one notch
or More significant upward/downward pressure to change score or rating by more than one notch






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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
Moodys Related Research
Rating Methodology:
Moodys Rating Methodology for US Health Insurance Companies, May 2011 (133040)
Industry Outlook:
US Healthcare Insurers: Outlook Changed to Negative from Stable, January 2014 (163188)
Special Comments:
Q4 2013 Insurance CDS Spreads Tighten: US Health Insurers in Focus, February 2014 (163370)
US Healthcare Insurance - Industry Scorecard, November 2013 (160573)
Sector Comments:
Affordable Care Act Policies Automatic Renewal is a Mixed Bag for US Health Insurers, July
2014 (172579)
US Health Insurers Proposed Rate Increases on Affordable Care Exchanges Are Credit Positive,
June 2014 (172148)
Final Medicare Rates for 2015 Are Credit Negative for US Health Insurers, April 2014 (168032)
Affordable Care Act Open Enrollment Extension Is Credit Negative for Insurers, March 2014
(166679)
US Affordable Care Act Extension Is Credit Negative for Healthcare Insurers, March 2014
(165841)
US Health Insurers See Credit-Negative 2015 Preliminary Medicare Rates, February 2014
(165451)
Medicare Advantage Enrollment Results are Credit Positive for Health Insurers, February 2014
(165295)
Proposed Changes to Affordable Care Act Are Credit Negative for Health Insurers, February 2014
(164978)
Preliminary US Healthcare Exchange Demographics Are Credit Negative for Health Insurers,
January 2014 (162822)
US Health Insurers Get Dose of Complexity and Risk from New Requirements, December 2013
(161799)
Affordable Care Act Changes Are Credit Negative for US Health Insurers, December 2013
(161039)
Issuer Comments:
Highmark Transition Agreement with UPMC is Credit Positive, July 2014 (172580)
Aetnas Health Insurance CAT Bonds Provide Limited Risk Protection, January 2014 (163362)
Highmark-WPAHS Affiliation Is Negative for Highmark, Positive for WPAHS, May 2013
(153613)
To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of
this report and that more recent reports may be available. All research may not be available to all clients.




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CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS
KEY INDICATORS
Aetna Inc.
($ millions) 2013 2012 2011
Revenue 47,295 36,600 33,782
Net income 1,914 1,658 1,986
Total Equity 14,078 10,429 10,120
Cigna Corporation
($ millions) 2013 2012 2011
Revenue 32,380 29,119 21,865
Net income 1,476 1,623 1,260
Total Equity 10,677 9,883 7,994
Humana Inc.
($ millions) 2013 2012 2011
Revenue 41,313 39,126 36,832
Net income 1,231 1,222 1,419
Total Equity 9,316 8,847 8,063
UnitedHealth Group Inc.
($ millions) 2013 2012 2011
Revenue 122,489 110,618 101,862
Net income 5,625 5,526 5,142
Total Equity 33,324 33,299 28,292
WellPoint, Inc.
($ millions) 2013 2012 2011
Revenue 71,024 61,497 60,711
Net income 2,490 2,656 2,647
Total Equity 24,765 23,803 23,288
Source: Company reports (form 10-K filings).




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14 JULY 31, 2014

CREDIT FOCUS: MEDICARE ADVANTAGE CUTS: PROGNOSIS NOT BAD FOR MOST HEALTH INSURERS

Report Number: 173285
Authors
Stephen Zaharuk
Ellen Fagin
Production Specialist
Shubhra Bhatnagar







2014 Moodys Corporation, Moodys Investors Service, Inc., Moodys Analytics, Inc. and/or their licensors and affiliates (collectively, MOODYS). All rights reserved.
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