A ratings agency for the insurance industry upgraded its financial outlook for Blue Cross and Blue Shield of Minnesota, citing improved operating performance last year at the state’s largest not-for-profit health plan.

A.M. Best, the New Jersey-based ratings agency, affirmed its financial strength rating for Minnesota Blue Cross and its HMO subsidiary, Blue Plus, as A- (Excellent). But the agency upgraded the outlooks underlying those ratings, to stable from negative. A ratings outlook is a glimpse at the potential future direction of the rating.

“The revised outlooks for BCBSM reflect continued turnaround in operating performance through 2018, driven by Medicaid and commercial businesses,” an announcement from the ratings agency said. “Prospective operating results are expected to benefit from medical cost containment achieved through value-based provider partnerships and further operating efficiencies gained through recent investment in technology.”

Factors that could potentially offset the enhanced outlook include financial pressure from dividend payments that Blue Cross makes to its parent holding company, Aware Integrated, and accelerated investments in operational capabilities, the agency said.

In May 2017, A.M. Best changed its outlook for Eagan-based Minnesota Blue Cross to negative from stable, after the health plan posted financial losses the prior year amid rising expenses related to a new IT system.

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