Blue Cross of California Broadens Large Group Product Line With Consumer-Driven PPO.

Business Editors & Health/Medical Writers

WOODLAND HILLS, Calif.--(BUSINESS WIRE)--Oct. 1, 2002

Power HealthFund PPO Provides Members With Necessary Tools to

Become More Actively Involved in Their Health Care Choices

Blue Cross of California today announced the launch of the Power HealthFund PPO (preferred provider organization) for large employers with 500 or more employees on both an Administrative Services Only and an insured basis(a). The PPO coverage options will be offered by Blue Cross of California and its California affiliate, BC Life & Health Insurance Company. Additionally, the companion Health Reimbursement Arrangement (HRA) and Flexible Spending Account (FSA) administration will be offered by BC Life & Health Insurance Company. The product will be available by the end of October 2002 with an effective start date of January 1, 2003.

A new product approach to health care coverage in the large group market, the Power HealthFund PPO offers a menu of the latest health care financing features available. The product combines a high deductible PPO with a supplemental employer funded HRA, which is an annual fixed amount -- or defined contribution -- and an optional member-funded FSA.

"When employees are allowed to participate in their own health spending, they become more active in managing their own as well as their family's health care needs and costs," said David Helwig, president of Blue Cross of California. "In addition, the cost incentives and informational resources built into the Power HealthFund PPO allows employees to be more educated utilizers of health care services."

"In the current climate of escalating double-digit health care cost increases, we are very pleased to offer large group clients a product that can assist them in controlling their benefits costs," said Mike Higgins, general manager, special accounts. "The goal of the Power HealthFund PPO is to empower the employee and let them make their own informed and cost-conscious decisions."

    The basic components of the Power HealthFund PPO include:

    1) A high deductible PPO ranging from $1,000 to $5,000

    2) An employer funded Health Reimbursement Arrangement (HRA)

    3) An employee funded Flexible Spending Account (FSA)

    4) Web-based HRA and FSA personal account management tools and
       consumer information including SUBIMO Health Care Advisor (a
       service that allows members access to quality and medical
       outcome data for hospitals statewide) and Blue Cross of
       California's unique Consumer Cost Guide (a guide to help
       members understand the relative cost differences between
       hospitals based on inpatient and outpatient data and
       communicated through a four-tiered price tag icon system for
       network hospitals in California)

    5) The custom Web site developed for this product gives
       administrators the ability to provide web-based enrollment for
       all BC Life & Health Insurance Company and Blue Cross of
       California medical products and FSAs.

According to Helwig, "Blue Cross has always had a strong tradition of product innovation to address both employer and member needs. Consumer-driven health care options like Power HealthFund will allow our members to have more direct input and control over their participation in personal health care spending and allow our larger clients flexible options to mitigate their health care expenditures."

Blue Cross of California and its California affiliates, with more than 6.7 million medical members, is an operating subsidiary of WellPoint Health Networks Inc., one of the nation's largest publicly traded health care companies. WellPoint serves the health care needs of more than 13 million medical members and approximately 45 million specialty members nationally. WellPoint offers a broad spectrum of quality network-based health products including open access PPO, POS and hybrid products, HMO and specialty products. Specialty products include pharmacy benefit management, dental, utilization management, vision, mental health, life and disability insurance, long term care insurance, flexible spending accounts, COBRA administration, and Medicare supplements. Blue Cross of California may be found on the web at www.bluecrossca.com. BC Life & Health Insurance Company and Blue Cross of California are independent licensees of the Blue Cross Association.

(a) Blue Cross Power HealthFund PPO is available to Administrative
    Services Only(1) (ASO) or ASO/Stop-Loss(2) clients with more than
    500 eligible subscribers, or on an insured basis to groups with at
    least 500 currently enrolled PPO subscribers.

    1.  ASO refers to self-funded clients/employers who bear all
        financial and legal risk for their health plan. In these
        instances, BC Life & Health provides claims processing and
        other administrative services only.

    2.  Stop-Loss contracts provide the insurance of claims in excess
        of particular levels when used with self-funded plans.