HealthWise membership growth supports record earnings.

NASHVILLE, Tenn.--(BUSINESS WIRE)--August 2, 1995--HealthWise of America, Inc. (NASDAQ NM: HOAM) today announced record results for the second quarter of 1995. Operating revenues for the quarter ended June 30, 1995 were $51.3 million compared to operating revenues of $39.7 million for the comparable quarter in 1994, an increase of 29%. Net income for the quarter was $2.1 million, or $.31 per share, compared with earnings of $1.6 million, or $.26 per share for 1994, a per share increase of 19%.

For the six months ended June 30, 1995, operating revenues were $99.7 million compared to operating revenues of $78.3 million for the same six months of 1994. This was an increase of 27%. Net income for the six months ended June 30, 1995 was $4.0 million, or $.60 per share, compared with earnings of $3.0 million, or $.48 per share for the same six months for 1994, a per share increase of 25%.

"Our membership growth of 32% during the quarter was an important factor in achieving record earnings," said Ken Melkus, HealthWise's Chairman and Chief Executive Officer. Melkus added, "These results are particularly gratifying given our corporate commitment to develop new HMOs which generate losses during their beginning stages of operations."

HealthWise completed the second quarter with approximately 135,000 members compared with 102,000 for the comparable period ended in 1994, or 32% growth.

Melkus added, "The competition for new membership grows as more companies expand and enter different markets. Success for our Company is not solely dependent upon acquiring new members but also requires us to effectively manage the increased cost and utilization of medical services being experienced throughout the industry. HealthWise remains committed to pursue these goals of reasonable growth and aggressive cost containment."

HealthWise of America operates HMOs in Kentucky, Maryland, Tennessee and Arkansas and is traded on the Nasdaq Stock Market (National Market) under the symbol HOAM.

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              HEALTHWISE OF AMERICA, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME
                (in thousands, except per share amounts)
                               (unaudited)

                              Three Months Ended    Six Months Ended
                                    June 30,            June 30,
                                1995      1994      1995      1994
Operating Revenues:
 Managed care premiums         $51,036   $38,941   $99,104   $76,953
 Management services               262       794       551     1,313

  Total Operating Revenues      51,298    39,735    99,655    78,266

Expenses:
 Medical services costs         39,851    30,296    77,231    59,694
 Selling, general and
  administrative                 7,588     5,590    15,000    10,643
 Depreciation and amortization     288       112       555       212

  Total Expenses                47,727    35,998    92,786    70,549

Operating income                 3,571     3,737     6,869     7,717
Investment and other income        765       590     1,723     1,080
Interest expense                  (242)     (150)     (566)     (150)

Income before income taxes and
 minority interests              4,094     4,177     8,026     8,647

Provision for income taxes      (1,444)   (1,042)   (2,774)   (1,938)

Minority interests in earnings
 of partnerships and
 consolidated subsidiary          (574)   (1,507)   (1,260)   (3,678)

Net income                      $2,076    $1,628    $3,992    $3,031

Weighted average number of
 common and common equivalent
 shares                          6,729     6,281     6,697     6,364

Net income per share             $0.31     $0.26     $0.60     $0.48

CONTACT: HealthWise of America, Inc., Nashville

Ken Melkus or Harold Simpson, 615/385-4666