Blue Cross Reaches Agreement On Terms of Acquiring Wisconsin Health Insurance Business of Wellmark Community Insurance, Inc.

Health & Medical Editors/Business Editors

MILWAUKEE--(BW HealthWire)--March 30, 2000

Blue Cross & Blue Shield United of Wisconsin has reached an agreement on the terms of acquiring all of the Wisconsin health insurance business of Wellmark Community Insurance, Inc., the Blue Cross and Blue Shield insurance company based in Des Moines, Iowa. The Wisconsin block of business includes group health and dental plans, individual and small group health and Medicare supplement policies. The plans collectively provide insurance to more than 15,000 people.

"This is a substantial increase in Blue Cross & Blue Shield's subscriber base and represents the company's continued commitment to health care solutions for the people of Wisconsin," said Penny Siewert, senior vice president of Blue Cross & Blue Shield. "The majority of the business will be serviced in our Southwestern Regional office in Evansville, with the Medicare supplement policies administered in our Service Center in Oshkosh."

Most of the acquired business consists of individuals and small groups enrolled under the Wisconsin Farm Bureau Federation Health Plan. This plan is marketed exclusively by agents of Rural Mutual Insurance Company of Madison, WI. Blue Cross & Blue Shield is currently negotiating agreements with both Rural Mutual and the Wisconsin Farm Bureau Federation.

"The continued support of Rural Mutual and the Farm Bureau is critical. This program serves the important health insurance needs of farmers and rural small businesses and we look forward to working with both Rural Mutual and the Farm Bureau to develop the program," said Siewert.

In November of 1999, Wellmark announced its intention to exit the Wisconsin market to focus on the company's historic core markets in Iowa and South Dakota, said Lucinda Stephenson, vice president of Corporate Relations for Wellmark. Stephenson said this decision does not affect Wellmark's third-party administrator (TPA) business. Wellmark Administrators, Inc., Wellmark Administrators of South Dakota, Inc., and First American Administrators, Inc., which each administer self-funded employer plans in areas throughout the Midwest, will continue activities in multiple states.

Blue Cross & Blue Shield intends to sign definitive agreements with Wellmark, Rural Mutual and the Farm Bureau shortly. Specific terms of the acquisition were not disclosed and the transaction is subject to regulatory approval.

Blue Cross & Blue Shield United of Wisconsin is the state's largest health insurer. Headquartered in Milwaukee, Blue Cross also operates regional service centers in Milwaukee, Fond du Lac, Eau Claire, Evansville, and Stevens Point. The company is affiliated with United Wisconsin Services, Inc. (NYSE: UWZ), one of the nation's leading managed care companies, serving 1.9 million lives in 41 states. The Blue Cross Internet address is www.bcbsuw.org and the Internet address for United Wisconsin Services is www.uwz.com