Blue Shield of California and UnitedHealth Group Announce Joint Strategic Effort to Enhance Health Care Programs in California.

Business Editors/Health & Medical Writers

SAN FRANCISCO--(BW HealthWire)--July 14, 2000

UnitedHealthcare to Transfer Health Plan Membership to Blue Shield 

New Alliance with Uniprise Created to Serve Large,

Multi-Site Employers

UnitedHealth Group (NYSE:UNH) and Blue Shield of California today announced that they have entered into definitive agreements under which UnitedHealthcare, a wholly-owned subsidiary of UnitedHealth Group, will transfer its California health plan membership of approximately 225,000 people to Blue Shield of California. Also under the agreements, Blue Shield will provide access to its extensive network of over 42,000 physicians and medical facilities to Uniprise, a separate wholly-owned subsidiary of UnitedHealth Group, which serves approximately 700,000 employees and dependents of large, multi-site companies in California.

"We appreciate UnitedHealth Group's endorsement of Blue Shield's value as a health care provider to California consumers and we welcome its members," said Bruce G. Bodaken, chairman and chief executive officer of Blue Shield of California. "The addition of UnitedHealthcare members and the association with UnitedHealth Group further strengthens Blue Shield's presence in California. We are excited about the prospect of integrating these new members into our statewide provider network, which we believe offers the most comprehensive coverage to the state's locally headquartered employers and their employees. This will further enhance our ability to offer higher quality health services to our customers at all levels."

"This unique collaboration genuinely demonstrates that UnitedHealth Group has a real concern for its members and employer groups which neatly fits the Blue Shield mission of consumer focus," added Bodaken. "The transition allows both companies to focus on their strengths and minimizes disruption of care. It's a win for everybody...starting with individual consumers and extending to employers and those who provide care throughout the state."

The transfer agreement primarily involves those individuals covered by UnitedHealthcare in California. Employees and dependents of large, multi-site companies will continue to be served by Uniprise, which is expanding its programs in California through a new alliance with Blue Shield. This transfer also does not affect AARP members in California who have Medicare supplement or hospital indemnity coverage through UnitedHealth Group.

Stephen Hemsley, president and chief operating officer of UnitedHealth Group, said, "The member transition and the network and commercial relationships with Blue Shield of California underscore our commitment to developing flexible strategies to improve consumers' health and well-being, customized for local market conditions. In this case, we believe that will be achieved by leveraging our respective strengths on behalf of those we serve."

Hemsley added, "This new relationship with Blue Shield of California combines the resources of two independently strong organizations to better serve people in the state of California. We look forward to developing this relationship given the commonality of our views on expanding access to care, increasing choices, facilitating coordination of health care through positive interaction with physicians and other providers of care, improving information flow, and applying technological advances to customer services."

Both Blue Shield and UnitedHealthcare emphasized that all consumers affected by the transition will receive uninterrupted coverage and access to care. The transition is subject to regulatory review and customary closing conditions. UnitedHealthcare anticipates beginning the transfer of its members to Blue Shield by the end of the current year.

UnitedHealth Group (www.unitedhealthgroup.com) provides a broad spectrum of resources and services to help people achieve improved health and well-being through all stages of life. UnitedHealth Group is organized into six businesses: UnitedHealthcare, Uniprise, Ovations, Specialized Care Services, Ingenix and UnitedHealth Capital.

Blue Shield of California (www.blueshieldca.com), an independent member of the Blue Shield Association, is California's second largest not-for-profit health plan. Headquartered in San Francisco, its health maintenance organization and preferred provider organization have a combined membership of 2.1 million members and annual revenue of $3.5 billion.