Highmark Inc.

Highmark's competitive risks include its geographic concentration, because 70%-75% of its members are in Pennsylvania (including 1.6 million Pennsylvania-based national accounts). While Highmark is consistently profitable, its recent operating margin (adjusted EBIT return on revenue [ROR] of 1.4% in 2022) and forecasted margins (adjusted EBIT ROR of 1%-2% in 2023-2024) are relatively modest, reflecting the competitive nature of its markets and strategic growth investments. We select the lower of the split anchor of 'a+/a' in our rating assessment of the company partly because of Highmark's margins that are near the low end of what we consider as average (2%-5%) for the industry. The stable outlook on Highmark reflects our expectation that it will maintain its leading market positions and very

...Highmark Inc. is one of the largest BCBS plans in the U.S. Pittsburgh, PA-based Highmark Inc. (Highmark) is a multi-state Blue Cross & Blue Shield (BCBS) licensed health plan that generated $20.5 billion in premium revenue in 2022, and covered 5.3 million medical members in Pennsylvania, Delaware, West Virginia, and New York at year-end 2022. In addition to its health insurance business, Highmark's subsidiary businesses include United Concordia, a national dental insurance provider, and HM Insurance Group (HMIG), an employer medical stop-loss business. Highmark is the largest subsidiary of Highmark Health, a nonprofit diversified health care group, which generated $25.8 billion in total revenue (including net investment income) in 2022. Highmark Health also owns Allegheny Health Network (AHN), a hospital system in Western Pennsylvania, and enGen, a health care technology company. Highmark Inc. has a strong competitive position in its market with an opportunity for geographic expansion within...

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