Standard & Poor's Ratings Services cut its credit rating on Blue Cross and Blue Shield of Oklahoma, Tulsa, and its BlueLincs HMO subsidiary to BBB from A- because of lower projected earnings and reduced capital but affirmed the health insurer's stable outlook. The company's net income is expected to fall to $5 million in 2002 from $17.8 million in 2001 and then rebound to about $18 million in 2003 as it implements new pricing strategies. Meanwhile, the company's capital adequacy is expected to decline from a "strong level" in 2001 to a "good level" in 2002 and 2003, as membership growth slows from 14% this year to 5% in 2003. Its market position and managed-care capabilities remain strong and its liquidity remains good, analysts said. With 770,000 members, the company holds a dominant 25% of the Oklahoma market. -- by Laura B. Benko
S&P downgrades Okla. BCBS, BlueLincs
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