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FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 16, 2019 02:50 PM (EST)
AM Best has placed under review with positive implications the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb-” of QCA Health Plan, Inc. (QCA) (Little Rock, AR). The Credit Rating (rating) action follows the announcement that QCA has entered into a definitive agreement to be acquired by Centene Corporation (Centene), subject to regulatory approval. The transaction is expected to close in early 2019.
The under review with positive implications status reflects the potential financial and operational benefits that QCA can realize if it becomes a subsidiary of Centene, one of the leading managed care providers for the low income population in the United States. The QCA transaction will be in line with Centene’s strategy to expand through small to midsize acquisitions. Centene has more-than-sufficient financial flexibility and a history of supporting its subsidiaries if needed. Through nine months of 2018, Centene recorded shareholders’ equity growth and improved its financial leverage ratio.
QCA has reported improved earnings due to rate increases and lower utilization in the individual exchange business over the past two years.
The ratings will remain under review pending the completion of the transaction and AM Best’s assessment of Centene’s future operating plans for QCA.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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