Dive Brief:
- Fitch Ratings has downgraded Health Insurance Plan of Greater New York's credit score to a rating of BB+.
- Health Insurance Plan of Greater New York is the largest of EmblemHealth's two subsidiaries.
- The company's credit rating was lowered just two months before Karen Ignagni, former CEO of America's Health Insurance Plans, is to take over as CEO of EmblemHealth.
Dive Insight:
EmblemHealth lost a total of $494 million in 2014 on around $7 billion in revenue. According to Fitch analysts, during the first quarter of 2015, the company lost an additional $40 million, which has put it in a financial position that falls "materially outside Fitch's ratings expectations."
The majority of EmblemHealth's customers are New York City employees, but the company is also drawing a lot of business from the state's insurance exchange program. As with a lot of companies that are working with healthcare exchanges, EmblemHealth has been losing money on exchange products. Analysts expect it will be at least a few years before those plans will turn a profit.