Moody's affirms WellPoint

Moody's Investors Service said it has affirmed WellPoint, Inc.'s Baa1 senior unsecured debt rating and the A1 insurance financial strength ratings of its operating subsidiaries following the company's announcement that the Centers for Medicare and Medicaid Services had lifted marketing and enrollment sanctions on its Medicare Advantage and Part D products.

The outlook remains negative.

According to Moody's, while WellPoint has made progress in improving operating results and strengthening its regulatory risk-based capital ratio, pressures on the sector as a result of the economic downturn and the potential impact of healthcare reform create uncertainties that could have a significant negative financial impact.

In particular, rising unemployment has led to membership losses throughout the health insurance sector and is likely to continue into 2010, Moody's said.

The agency's vice president Steve Zaharuk stated: "WellPoint lost about 500,000 commercial members through in-group attrition during the first half of 2009, and although indications are that sales for 2010 new membership are strong, the company may still have another year of net membership loss in 2010."

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