1. Bear Stearns 2005 London Health Care Conference May 10, 2005 The Four Seasons, London PacifiCare Health Systems Gregory W. Scott Executive Vice President and CFO

2. 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 Form10K filed as of December 31, 2004. Cautionary Statement

3. A Fortune 200 company with: $12 billion in revenue 2.6 million commercial lives 715K Medicare Advantage lives 10 million specialty lives Strategy of a growth company PHS 8 health plan markets before acquisitions PHS Only Markets 2004 Markets – Pre-AMS Acquisition

4. Expansion through recent acquisitions 28 Additional medical states after American Medical Security Group acquisition PHS Only Markets 2005 Markets – Post-AMS Acquisition AMS Only Markets PHS & AMS Overlaps A Fortune 200 company with 2005 goals of: $14.1 billion in revenue 2.7 million commercial lives 743K Medicare Advantage lives 11.8 million specialty lives

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

6. Adds a total of more than 370K ISG PPO lives = 15% commercial member increase Focus on important ISG market segment Expanded network of independent agents increases distribution for PHS products/services Commercial growth/diversification balances Medicare Advantage business Geographic expansion diversifies outside of CA Benefits of AMS and Pacific Life acquisitions

7. Earnings growth * 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 $303 $370-$385

8. 2005 Guidance Commercial mbrshp. growth: 5.0%-6.0% Medicare Advantage ending mbrs: 743K Revenue increase:17.5%-18.5% MLRs Consolidated = 84%-85% Private Commercial = 81%-82% Private Senior = 73%-74% Government Senior = 87.5%-88.5% Gross Margins Commercial = 18%-19% Senior = 11.5%-12.5% Specialty & Other = 38%-39% EBITDA: $750-$775 million CFFO:$500-$525 million Free Cash Flow: $320-$335 million SG&A ratio: 12.75%-13.25% Depreciation/Amortization: $89 million Capital expenditures: $130-$135 million Net Income: $365-$380 million Average outstanding shares: 98.8 million EPS: $3.70-$3.85 Q2 = $0.92-$0.97 Tax rate: 38.8% Includes effect of FAS 123R on equity based compensation = 20%-25% Net Income Growth = 20%-25% Net Income Growth

9. Planned evolution from a traditional health maintenance organization into a leading consumer health organization HMO DIVERSIFIED INSURANCE COMPANY CONSUMER HEALTH ORGANIZATION PacifiCare Vision

10. 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 Front End Decision Support Quality Index Profiles Benefit Selection Pricer Health Risk Assessment Worksite/Web Based Tools On-Line Enrollment Low Cost High Cost Signature Freedom Signature Independence SignatureValue Select Hospital Plan SignatureValue Advantage SignatureOptions Advantage SignatureValue Traditional Plan SignatureOptions Traditional Plan HSA/SDHP HMO/EPO PPO Indemnity PacifiCare offers a total solution

11. Specialty company growth- Pharmacy Benefit Management Company (PBM) Prescription Solutions’ Unaffiliated Membership

12. Specialty company growth * 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, ~ $890M in 2005 mainly for PHS contract. $1,647

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

14. Specialty company growth- Recent PBM recognition  Among MCOs: Top rated PBM on 5 of 8 evaluation factors - Recent Flashpohler Research survey  Of 2nd tier PBMs, mentioned more than any other PBM - CSFB report, 10/04  Outperforms the industry in pharmacy management; and doing an excellent job regarding its primary functions: rebates, network management, mail service and generic fill rates - CapGemini Benchmarking study, 2004  #2 among all PBMs in mail order satisfaction – PCMA 2004  Rx Benefit Innovation Award- The Pharmacy Benefit Management Institute

15. Medicare opportunities  Medicare Advantage HMO/ Private Fee for Service  Part D Administration- Prescription Drug Plan (PDP)  Medicare Supplement  Medicare Advantage Regional PPO

16. Medicare opportunities  Medicare Advantage HMO Goals of Medicare Modernization Act Stabilize membership through increased benefits and provider payments Nationwide ’04 MA Risk member increase = 98,500 PHS had 3 of 4 fastest growing plans in U.S. PHS had 22K net adds in ’04; target growth in ’05 = 39K Position MA for growth in 2006 Broker distribution Geographic expansion Preferred provider relationships = Value Plans Community & faith-based organization marketing Small acquisitions CMS demonstration project

17.  Part D Administration- Potential market 35.7 million 17 million Medicare opportunities + Group Retiree = ??M

18.  Part D Administration- Model of potential market share PHS to offer benefits nationally, in all 34 PDP regions Assume 10 national/large PDPs + 3 regional PDPs in each region Assume equal distribution of 17 million assumed ’06 membership Example: Medicare opportunities Potential revenue excludes additional subsidies for low income, institutionalization, etc. PHS will issue specific guidance late 2005 6-8% $1.3-$2.2 billion with PBM mail order revenue Pro Rata Annualized 1 st Year Market Share Revenue Opportunity

19. Medicare opportunities  Part D Administration- PHS capabilities Captive PBM w/ external focus (new mail order facility in planning) 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