[March 30, 2015]

Fitch Places UnitedHealth Group's Ratings on Negative Watch Following Announcement of Acquisition

Fitch Ratings has placed UnitedHealth Group Incorporated's (UnitedHealth) 'A' Issuer Default rating and insurance-company subsidiaries' 'AA-' Insurer Financial Strength (IFS) ratings on Rating Watch Negative after UnitedHealth announced a sizeable acquisition to be funded by debt and cash flow from operations. A complete list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The Negative Rating Watch reflects the intention of UnitedHealth to significantly increase financial leverage to fund the newly announced acquisition of Catamaran Corp. Fitch expects UnitedHealth to issue approximately $13 billion in senior unsecured debt, increasing financial leverage ratios materially beyond Fitch's current downgrade triggers.

Upon issuance of the debt, Fitch estimates the financial leverage ratio will increase to approximately 47% from 35% at yearend 2014 compared to Fitch's 35% trigger. Similarly, Debt-to-EBITDA is estimated to increase to approximately 2.3x from 1.5x at yearend 2014 compared to Fitch's downgrade trigger of 1.9x. EBITDA coverage of interest will decline to an estimated range of 10x - 12x, down from 18x at yearend 2014, but remaining above Fitch's 8x downgrade trigger.

UnitedHealth is forecasting capitalization ratios to return to historical ranges within an 18-24 month time frame. Further, the company has a successful history of sizeable acquisitions and credible forecasts.

Catamaran is a publicly traded provider of pharmacy benefit management (PBM), and the acquisition by UnitedHealth will create the third largest PBM. The Catamaran acquisition will cost $14.1 billion, including the $1.2 billion repayment of existing bank debt, and is expected to close by the fourth quarter of this year.

Favorably, the announced acquisition will further increase UnitedHealth's scale and diversity, particularly its sources of unregulated earnings and cash flows. Fitch continues to view UnitedHealth's overall market position within the health insurance and managed care sector as largely unique, in that it enjoys strength across a broad spectrum of products, services, and geographies.

RATING SENSITIVITIES

Key rating triggers that could result in a downgrade include:

--Fitch expects to resolve the Negative Rating Watch upon UnitedHealth's issuance of debt to fund the acquisition. The likely result would be either a continuation of the Negative Rating Watch or single notch downgrade of all ratings. Rating actions will be based on Fitch's evaluation of execution risks associated with the transaction and the company's plan to reduce financial leverage.

--Developments related to healthcare reform that significantly impair UnitedHealth's ability to appropriately price its products, or otherwise severely restrict the company's cash flow could lead to negative rating actions.

Key rating triggers that could result in a return to a Stable Outlook include:

--Debt-to-EBITDA ratio below 1.9x and debt-to-capital ratio below 35%, while maintaining a double-digit EBITDA-to-interest coverage ratio.

Fitch has placed the followng ratings on Negative Watch:

UnitedHealth Group Incorporated

--Long-term IDR 'A';

--Short-term IDR 'F1';

--Commercial paper rating 'F1';

--0.850% senior unsecured notes due 2015 'A-';

--5.375% senior unsecured notes due 2016 'A-';

--1.875% senior unsecured notes due 2016 'A-';

--6.000% senior unsecured notes due 2017 'A-';

--1.400% senior unsecured notes due 2017 'A-';

--6.000% senior unsecured notes due 2017 'A-';

--1.400% senior unsecured notes due 2017 'A-';

--6.000% senior unsecured notes due 2018 'A-';

--1.625% senior unsecured notes due 2019 'A-';

--2.300% senior unsecured notes due 2019 'A-';

--3.875% senior unsecured notes due 2020 'A-';

--4.700% senior unsecured notes due 2021 'A-';

--3.375% senior unsecured notes due 2021 'A-';

--2.875% senior unsecured notes due 2021 'A-';

--2.875% senior unsecured notes due 2022 'A-';

--0% senior unsecured notes due 2022 'A-';

--2.750% senior unsecured notes due 2023 'A-';

--2.875% senior unsecured notes due 2023 'A-';

--5.8% senior unsecured notes due 2036 'A-';

--6.5% senior unsecured notes due 2037 'A-';

--6.625% senior unsecured notes due 2037 'A-';

--6.875% senior unsecured notes due 2038 'A-';

--5.7% senior unsecured notes due 2040 'A-';

--5.95% senior unsecured notes due 2041 'A-';

--4.625% senior unsecured notes due 2041 'A-';

--4.375% senior unsecured notes due 2042 'A-';

--3.95% senior unsecured notes due 2042 'A-';

--4.25% senior unsecured notes due 2043 'A-'.

UnitedHealthcare Insurance Company

UnitedHealthcare Insurance Company of Illinois

UnitedHealthcare Insurance Company of New York

Sierra Health & Life (News - Alert) Insurance Company, Inc.

Health Plan of Nevada, Inc.

UnitedHealthcare of Florida, Inc.

PacifiCare of Arizona, Inc.

Oxford Health Insurance, Inc.

Oxford Health Plans of New York, Inc.

UnitedHealthcare of Wisconsin, Inc

UnitedHealthcare Benefits of Texas, Inc.

UHC of California

PacifiCare Life & Health Insurance Company

UnitedHealthcare Plan of the River Valley

--IFS at 'AA-'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (September 2014);

--'Health Insurance and Managed Care (U.S.) Sector Credit Factors' (August 2014).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=756650

Health Insurance and Managed Care (U.S.) Sector Credit Factors

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686930

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=982152

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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