Texas Health Choice Selected as HMO Insurance Plan for Texas State Employees; Company Expects Significant Membership Growth.

Business Editors

DALLAS/FORT WORTH, Texas--(BUSINESS WIRE)--July 19, 2001

Texas Health Choice L.C. (TXHC), a wholly owned subsidiary of Sierra Health Services Inc. (NYSE:SIE), today announced that it has been selected by the Employees Retirement System of Texas to provide HMO services to active and retired state and higher education employees and their dependents who work or reside in Dallas and Tarrant counties.

Approximately 8,000 of these employees and retirees will be eligible to enroll in TXHC in these counties. The contract is effective Sept. 1, 2001, through Aug. 31, 2002.

Those eligible employees who elect TXHC will have access to a network of providers throughout the Dallas/Fort Worth metroplex. This network includes 33 hospitals, nearly 700 primary care physicians and more than 600 specialists.

The plan design will include comprehensive HMO benefit coverage with no deductibles and a $10 co-payment for physician office visits. Additionally, a three-tier pharmacy benefit will be offered at network retail pharmacies and through mail order.

"We are delighted to have been chosen by the state for Dallas and Tarrant counties," said David Marlon, president of TXHC. "Our company has made tremendous strides over the past six to nine months toward stabilizing our finances and significantly improving our operations."

TXHC expects to add several employees at its Dallas operations to manage the account and its utilization, and at Sierra's Las Vegas operations to handle the expected increase in claims and member service-related inquiries. TXHC currently employs more than 130 staff, mostly in its headquarters in North Dallas.

"While this contract will certainly bring tangible benefits to Texas Health Choice, in terms of increased membership, it will bring many intangibles as well," said Marlon. "As we move forward, we hope to leverage our improved membership volume to attract additional providers to our network and heightened interest from the community for Texas Health Choice products and services."

Texas Health Choice is a health maintenance organization providing health benefits to nearly 70,000 members in the Dallas/Fort Worth area. Plans available include traditional HMO plans, as well as point-of-service plans, individual plans and Medicare+Choice plans for Medicare beneficiaries.

Texas Health Choice is an operating subsidiary of Sierra Health Services Inc. (NYSE:SIE), a Nevada-based diversified health care services company, serving more than 1.2 million members.