Blue Cross and Blue Shield System Marks 9th Consecutive Year Of Enrollment Growth.

Business Editors/Health/Medical Writers

CHICAGO--(BUSINESS WIRE)--May 18, 2004

Blue Cross and Blue Shield Association (BCBSA) today announced total enrollment in the 41 independent Blue Plans across the country reached 88.8 million members at the end of 2003, up from 85.3 million at the end of 2002. This marks the 9th consecutive year that the Blue Cross and Blue Shield System has recorded enrollment growth.

"Consumers are continuing to turn to Blue Cross and Blue Shield Plans for value, dependability and financial strength," said Scott P. Serota, BCBSA president and CEO. "The System's leadership role in keeping quality healthcare affordable, the strength of the Blue Brands and our ability to serve Blue customers seamlessly all over the world are among the most important strengths differentiating Blue Plans from other health insurers."

Blue Plans paid out $156.9 billion in claims (85.9 percent of premiums) in 2003, up from 141.0 billion (86.6 percent of premiums) in 2002. Administrative expenses for Blue Plans fell from 11.1 percent of premiums for 2002 to 10.9 percent for 2003.

Total system-wide revenue was $182.7 billion in 2003, up from $162.8 billion in 2002 due to increased enrollment and rate increases to keep pace with rising claim costs and utilization. The system-wide aggregate net gain was $6.1 billion for 2003, 3.3 percent of revenue.

Aggregate statutory capital reserves at the end of 2003 were $31.9 billion, up from $24.5 billion at year-end 2002. Growth in capital reserves reflects the need for Blue Plans to hold increased contingency funds as enrollment increases and healthcare costs continue to rise dramatically across the country.

Strong Blue-branded product enrollment growth further reflects that Blue Cross and Blue Shield Plans' products offer the choices consumers are looking for with their health insurance:

-- PPO Products -- 52.3 million members

-- HMO Products -- 16.7 million members

-- POS (Point of Service) Products -- 6.0 million members

-- Traditional Indemnity -- 14.3 million members

Note: sum of total members by product exceeds total membership due to multiple coverages.

The Blue Cross and Blue Shield Association is made up of 41 independent, locally operated Blue Cross and Blue Shield plans that collectively provide healthcare coverage for 88.8 million -- nearly one-third of all Americans. For more information on the Blue Cross and Blue Shield Association and its Plans, visit http://www.bcbs.com.