Moody's may cut Health Net

Moody's Investors Service said it placed Health Net Inc.'s Ba1 senior unsecured debt rating under review for possible downgrade.

Moody's said this rating action follows management's announcement of a $252 million pre-tax charge in the fourth quarter, which resulted in a net after tax loss of $85.6 million for the quarter.

As a result of this loss, Moody's says that it expects Health Net's risk-based capital to be negatively impacted for 2004.

Moody's adds that the company's financial flexibility will be further reduced as 2005 earnings are retained at the operating subsidiaries to improve each subsidiary's capital position.

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