Coventry Health Care Reports Record Fourth Quarter Earnings of $0.97 per Diluted Share.

Revises 2007 Diluted EPS Guidance Range to $3.85 to $3.95

BETHESDA, Md. -- Coventry Health Care, Inc. (NYSE:CVH) today reported operating results for the quarter ended December 31, 2006. Operating revenues totaled $1.94 billion for the quarter with net earnings of $156.1 million, or $0.97 per diluted share. For the year ended December 31, 2006, total revenues were $7.73 billion with net earnings of $560.0 million, or $3.47 per diluted share.

"I am pleased to report another strong quarter of financial results to complete 2006," said Dale B. Wolf, chief executive officer of Coventry. "During the year, our health plans continued to perform at a high level, our Medicare business has expanded meaningfully and we successfully completed the integration of First Health. We have realigned our Company with a focus on positioning our well-diversified businesses for continued growth and new opportunities in 2007 and beyond."

Additionally, on February 8th Coventry announced that it had entered into a definitive agreement to acquire Concentra's workers' compensation managed care services businesses for $387.5 million in an all-cash transaction. As this transaction is not expected to close for 90 to 180 days, the financial impact has been excluded from all 2007 guidance elements.

Fourth Quarter Highlights

-- GAAP diluted EPS growth of 26.0% over the prior year quarter

-- Revenues up 12.9% over the prior year quarter

-- Consolidated operating margin of 11.7%

-- Medicare Part D membership of 687,000

-- GAAP cash flows from operations of $315.9 million or 202% of net
   income, including the impact of stand-alone Medicare Part D as
   detailed on page 8.

Full Year 2006 Highlights

-- Revenues up 17.0% over the prior year

-- Consolidated operating margin of 10.9%

-- GAAP cash flows from operations of $1,066.5 million or 190% of net
   income, including the impact of stand-alone Medicare Part D as
   detailed on page 8.

-- Share repurchase of 4.6 million shares

Fourth Quarter Operating Highlights

-- Health Plan Membership. As of December 31, 2006, Coventry had
   total health plan membership of 2.52 million members, an increase
   of 6,000 members from the prior quarter.

-- Health Plan Insured Commercial Trends. Commercial premium yields
   showed a favorable price-to-cost spread in the fourth quarter.
   Reported commercial yields rose to $262.72 PMPM (per member per
   month) in the quarter, an increase of 4.3% over the prior year
   quarter. Reported commercial medical expense was $203.10 PMPM in
   the quarter, an increase of 4.2% over the prior year quarter.

-- Health Plan Medical Loss Ratio (MLR). Health plan MLR was 78.3%, a
   50 basis point improvement over the prior year quarter. Commercial
   MLR of 77.3% improved 10 basis points, Medicare MLR of 75.4%
   improved 350 basis points, and Medicaid MLR of 87.4% was
   consistent with the prior year quarter.

-- Selling, General & Administrative (SG&A) Expenses. Consolidated
   SG&A expenses were 18.3% of operating revenues for the quarter, an
   improvement of 100 basis points from the prior year quarter.

-- Stand-Alone Medicare Part D(1). Medicare Part D contributed GAAP
   earnings of $0.16 per diluted share for the fourth quarter. As of
   December 31, 2006, Coventry had Part D membership of 687,000
   members. Total Part D revenue for the quarter was $165.6 million,
   including a reduction to revenue of ($48.3) million for CMS
   risk-sharing adjustments and ($8.6) million for revenue ceded to
   insurance company distribution partners. Premium yield, excluding
   the effect of CMS risk-sharing adjustments and ceded revenue, was
   $107.75 PMPM for the quarter.

-- Balance Sheet. Health plan net accounts receivable of $99.7
   million represent 5.8 days of sales outstanding (DSO). Health plan
   reserves remain stable with days in claims payable (DCP) for the
   quarter of 55.0, down 1.0 days from the prior quarter and down 0.6
   days from the prior year quarter.

(1) Represents the Medicare Part D Prescription Drug Plan and excludes the health plan Medicare Advantage business.

Consolidated Guidance Details

Q1 2007 Guidance

-- Total revenues of $2.10 billion to $2.30 billion

-- Earnings per share (EPS) on a diluted basis of $0.75 to $0.77

   -- Includes a ($0.04) charge for debt refinancing

   -- Includes seasonal impact of Medicare Part D

2007 Full Year Guidance

-- Medicare Private-Fee-For-Service membership of 90,000 to 100,000
   by year-end

-- Risk revenues of $7.90 billion to $8.15 billion

-- Management services revenues of $860.0 million to $880.0 million

-- Consolidated revenues of $8.76 billion to $9.03 billion

-- Consolidated medical loss ratio (MLR%) of 79.6% to 80.0%

-- Consolidated selling, general, and administrative expenses (SG&A)
   of $1.42 billion to $1.44 billion

-- Depreciation and amortization expense of $118.0 million to $124.0
   million

-- Investment income of $110.0 million to $120.0 million

-- Interest expense of $60.0 million to $63.0 million

   -- Includes a charge for debt refinancing

-- Tax rate of 37.8% to 38.2%

-- Diluted share count of 157.0 million to 159.0 million shares

-- Earnings per share (EPS) on a diluted basis of $3.85 to $3.95

Mr. Wolf will host a conference call at 8:30 a.m. ET on Friday, February 9, 2007. To listen to the call, dial toll-free at [phone] or, for international callers, [phone]. Callers will be asked to identify themselves and their affiliations. The conference call will also be broadcast from Coventry's Investor Relations website at www.cvty.com. Coventry asks participants on both the call and webcast to review and be familiar with its filings with the Securities and Exchange Commission (SEC). A replay of the call will be available for one week at [phone] or, for international callers, [phone]. The access code is 2409040.

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are defined as statements that are not historical facts and include those statements relating to future events or future financial performance. Actual performance may be significantly impacted by certain risks and uncertainties, including those described in Coventry's Annual Report on Form 10-K for the year ended December 31, 2005 and Coventry's Form 10-Q for the quarter ended September 30, 2006. Coventry undertakes no obligation to update or revise any forward-looking statements.

Coventry Health Care is a national managed health care company based in Bethesda, Maryland operating health plans, insurance companies, network rental, managed care and workers' compensation services companies. Coventry provides a full range of risk and fee-based managed care products and services, including HMO, PPO, POS, Medicare Advantage, Medicare Prescription Drug Plans, Medicaid, Workers' Compensation services and Network Rental to a broad cross section of individuals, employer and government-funded groups, government agencies, and other insurance carriers and administrators in all 50 states as well as the District of Columbia and Puerto Rico. More information is available on the Internet at www.cvty.com.

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(1) Revenue PMPM excludes the impact of CMS risk-share premium adjustments and revenue ceded to insurance company distribution partners.

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