UBS Annual Global Health Care Services Conference February 15, 2005 The Plaza, New York City

1. UBS Annual Global Health Care Services Conference February 15, 2005 The Plaza, New York City PacifiCare Health Systems Gregory W. Scott Executive Vice President and Chief Executive Officer

2. Cautionary Statement The statements made during this presentation that are not historical facts are forward-looking statements within the meaning of the Federal securities laws, and may involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from expectations include, but are not limited to, the risks discussed in the company's most recent filings with the SEC, including the Form 10Q filed as of September 30, 2004, and the Form10K filed as of December 31, 2003.

3. 2004 Markets – Pre-AMS Acquisition PHS Only Markets Strategy of a growth company PHS 8 health plan markets before acquisitions • A Fortune 200 company with: • $12 billion in revenue • 2.6 million commercial lives • 704K Medicare Advantage • lives • 11.8 million specialty lives

4. Completed 12/04 2005 Markets – Post-AMS Acquisition PHS Only Markets AMS Only Markets PHS & AMS Overlaps Expansion through recent acquisitions 28 Additional medical states after AMS acquisition

5. 1Q ‘05 Close Target 2005 Markets - Post Acquisitions PHS Only Markets AMS Only Markets PHS/AMS/Pac Life Overlaps Expansion through recent acquisitions Significant additional overlap with Pacific Life acquisition

6. ISG Market Segment Acquisitions American Medical Security Group (AMS) • Adds ~314K ISG PPO lives- 13% commercial member increase • Lower cost PPO operations on scalable ISG platform • Network of 32,000 independent agents increases distribution for PHS products/services • $100 million in excess statutory capital • Commercial growth/diversification balances Medicare Advantage business • Geographic expansion diversifies away from CA • Potential network, PBM & cross sell synergies

7. ISG Market Segment Acquisitions Pacific Life’s Group Health Business • Leverages AMS acquisition • Adds ~140K small/large group PPO lives- 6% commercial member increase • Network of 30,000 agents increases distribution for PHS products/services • Commercial growth/diversification balances Medicare Advantage business • Geographic expansion diversifies away from CA • 55% member overlap w/ PHS; 95% overlap w/ combined PHS/AMS = network synergies

8. = 19%-24% Net Income Growth 2005 Guidance- Excluding Pacific Life Includes effect of FAS 123R on equity based compensation

9. Earnings growth $360-$375 $303 * Excluding effect of the adoption of FAS 142 relating to the amortization of goodwill ^ Includes acquisition of American Medical Security Group & proposed acquisition of Pacific Life’s group health insurance business

10. DIVERSIFIED INSURANCE COMPANY CONSUMER HEALTH ORGANIZATION HMO PacifiCare Vision

11. The rise of HSAs & CDHPs • Continued cost shifting to employees, but without a value proposition • 5% HSA penetration rate by 12/31/06 • HSAs appeal to healthy/wealthy • HSAs likely to replace traditional PPO vs. HMO • Hewitt survey finds: • 61% of employers likely to offer HSAs in near future • 93% of employees willing to take more responsibility for health care decisions • Not total replacement, but additional option

12. SignatureValue Traditional Plan SignatureValue Select Hospital Plan SignatureOptions Advantage SignatureOptions Traditional Plan HMO/EPO SignatureValue Advantage PPO Signature Freedom Signature Independence HSA/SDHP Indemnity Low Cost High Cost • Front End • Decision Support • Quality Index Profiles • Benefit Selection Pricer • Health Risk Assessment • Worksite/Web Based Tools • On-Line Enrollment • On-Going Support - • Care Management • Disease Mgmt/ Web Admin • Health Credits • Women’s Health • Flexible Spending Account • Ethnic Diversity Programs • Specialty Offerings • Pharmacy • Dental & Vision • Behavioral • Life/STD/LTD • Caregiver • PAN PacifiCare offers a total solution

13. Self Directed Account $1,000 • Covered Services (apply to deductible): • Physician Office Visits • Wellness & Preventive Care • Office-based Diagnostic Tests AnnualDeductible$2,000 Employee Responsibility $1,000 to $2,000 $ In-Network 70% Out-of-Network 50% PPO Benefit Plan 100% After Coinsurance Maximum SignatureFreedom Plan Design Rx $10 generic$35 brand Employee Responsibility $1,000 to $2,000 Out-of-Network 50% In-Network 70%

14. SignatureFreedom Growth 82,172 Members • Approximately 10% from groups that did not previously offer insurance • 75% from Small Group (2 to 50 employees) • 90% from customers new to PacifiCare

15. Emerging SignatureFreedom Utilization Results • Participants are using appropriate levels of preventive services PacifiCare data is normalized (age/sex) incurred claims from 8/03 to 7/04 paid through 10/04

16. Emerging SignatureFreedom Utilization Results • Participants are using appropriate levels of preventive services PacifiCare data is normalized (age/sex) incurred claims from 8/03 to 7/04 paid through 10/04

17. Specialty company growth Prescription Solutions’ Unaffiliated Membership

18. Specialty company growth $1,647 * Breakout of internal vs. external revenue is not available prior to CY 2002. ^ Revenue increases related to a change in contracting methodology from the gross method to the net method for retail prescription drug transactions ~$50M in 2004, ~ $860M in 2005 mainly for PHS contract.

19. Specialty company growth 25.3% 26.0% 20.6% 20.3% 18.4% 18.7%

20. Medicare opportunities • Medicare Advantage HMO/ Private FFS • Part D Administration • Medicare Supplement • Medicare Advantage Regional PPO

21. Local Medicare Advantage growth- Timeline • All 2006 plan applications due March 23rd • ’06 Benchmark HMO rates issued April 4th (Parts A/B) • Health plan bids for Parts A, B & D due June 6th • National average monthly Part D bid announced August 3rd • CMS benefit plan approval September 14th • CMS website launches comparative plan data October 13th

22. Medicare opportunities • Medicare Advantage HMO • MLR rises from ~86% in ’04, to 87.5%-88.5% in ’05 • Focus on increasing membership vs. margins • 2006 growth depends on flexibility with benefit structure • Growth initiatives: • Preferred provider relationships • Broker distribution • Geographic expansion • Value Plans • Community & faith-based organization marketing • Small acquisitions

23. Medicare opportunities • Medicare Advantage Private FFS • Entering as many as 16 states by the end of 2005 • Nearly identical to MA HMO program, but no contracted provider network • Health Plans pay providers at Medicare FFS rates

24. Medicare opportunities • Part D Administration- Potential market • Approximately 42 million Medicare eligibles in the U.S. • MA penetration ~12% = 5 million • Eligible for FFS Part D ~ 37 million • Includes ~6 million dual eligibles to be auto-enrolled • Penalty for not enrolling = 1% per month • In terms of drug spend, 42 million seniors equivalent of 150 commercial lives

25. Medicare opportunities • Part D Administration- PHS capabilities • Captive PBM w/ external focus • Broad distribution capabilities • State-of-the-art mail facility • National pharmacy network • Risk-based business model • 10 years of senior prescription drug data • Managed care tools to control costs, improve outcomes • Additional marketing channels • Direct TV/radio advertising • Direct mail • Recent acquisitions • Broker distribution

26. Total ~$50 million Medicare opportunities • Part D Administration- Short term considerations • Costs for: • Building up infrastructure • IT, software, processing • Local MA and Part D Administration • Building up customer service platform • Marketing expenses Fixed Variable ✔ ✔ ✔ ✔ ✔ Not included in ’05 guidance