1. Banc of America Securities’ 34th Annual Investment Conference September 22, 2004 The Ritz Carlton, San Francisco PacifiCare Health Systems Howard G. Phanstiel Chairman & CEO

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 Form 10Q filed as of June 30, 2004, and the Form10K filed as of December 31, 2003. Cautionary Statement

3. Medicare Supplement PBM Behavioral Health 2004 Market Expansion Continued Market Expansion 2003 Health Plan + Specialty Companies 2003 Specialty Companies only 2004 Planned Specialty Company Expansion A Fortune 200 company with 2004 goals of: $12 billion in revenue 2.3 million commercial lives 717K Medicare+Choice HMO lives 11.8 million specialty lives Largest purchaser of health care services in the Western U.S.

4. Earnings Growth * Excluding effect of the adoption of FAS 142 relating to the amortization of goodwill $296-$306 $360-$375

5. Excess Statutory Capital Average of 400% RBC in core HMO states

6. 2004 Trends- YTD through June 30th Net income up 30% from 2003, excluding ‘03 favorable reserve developmentNet income up 30% from 2003, excluding ‘03 favorable reserve development Commercial business, year-over-yearCommercial business, year-over-year Membership up 107K (5%)Membership up 107K (5%) CA membership up 8%CA membership up 8% MLR down 60 basis pointsMLR down 60 basis points Gross margin up 17%Gross margin up 17% Medicare+Choice business, year-over-yearMedicare+Choice business, year-over-year Membership about flatMembership about flat M+C MLR up 210 bp, at low end of 2004 guidanceM+C MLR up 210 bp, at low end of 2004 guidance SG&A down 10 bp year-over-yearSG&A down 10 bp year-over-year Commercial premiums up 10% PMPM, over health care cost PMPM of 9%Commercial premiums up 10% PMPM, over health care cost PMPM of 9%

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

8. Grow commercial business through consumer- aligned products and ISG segment expansion Build Senior Solutions products/distribution Medicare Advantage growth Specialty company external member growth Prescription Solutions Behavioral health Dental & Vision Strategy for Growth

9. Acquisition of American Medical Security Group, Inc. AMS Background Information 2003 Revenue = $712 million2003 Revenue = $712 million 314,000 commercial PPO lives; mostly ISG314,000 commercial PPO lives; mostly ISG 250,000 specialty lives250,000 specialty lives Members in 33 states + District of ColumbiaMembers in 33 states + District of Columbia Network of 32,000 brokersNetwork of 32,000 brokers Products include HSAs, group life, disabilityProducts include HSAs, group life, disability Headquarters in Green Bay, WisconsinHeadquarters in Green Bay, Wisconsin Approximately 1,400 employeesApproximately 1,400 employees

10. Acquisition of American Medical Security Group, Inc. Transaction Summary Price: $32.75 cash per AMS share; ~$502M totalPrice: $32.75 cash per AMS share; ~$502M total Expected Close: 1 st quarter 2005Expected Close: 1 st quarter 2005 Financing: $400M new term loan + ~$160M internal cashFinancing: $400M new term loan + ~$160M internal cash Accretion: Net Income guidance increased by $10-$15M to $360-$375MAccretion: Net Income guidance increased by $10-$15M to $360-$375M Required Approvals: AMS shareholdersRequired Approvals: AMS shareholders Hart Scott Rodino Hart Scott Rodino WI & GA DOIs WI & GA DOIs

11. Acquisition of American Medical Security Group, Inc. Key Considerations/Value Drivers Diversifies PHS by product, geography & customerDiversifies PHS by product, geography & customer M+C reduced from 37% to 33% of total gross marginM+C reduced from 37% to 33% of total gross margin CA enrollment declines from 62% to 56% of totalCA enrollment declines from 62% to 56% of total Commercial membership (ISG) up 13%Commercial membership (ISG) up 13% Expansion of PPO into 29 states + D.C.Expansion of PPO into 29 states + D.C. Enhances broker distribution & facilitates cross- sellEnhances broker distribution & facilitates cross- sell 32,000 independent brokers32,000 independent brokers Cross sell opportunity for M+C, Med Supp, SignatureFreedomCross sell opportunity for M+C, Med Supp, SignatureFreedom

12. Acquisition of American Medical Security Group, Inc. Key Considerations/Value Drivers Acquire additional AMS product/functional expertiseAcquire additional AMS product/functional expertise ISG underwritingISG underwriting HSA, Group Life, Disability & Dental productsHSA, Group Life, Disability & Dental products Provides low cost, scalable platform to further expand ISG businessProvides low cost, scalable platform to further expand ISG business

13. Medicare Advantage Timeline Health Plan ACRs for 2005 submitted 9/13/04Health Plan ACRs for 2005 submitted 9/13/04 PPO and PDP regions defined: Oct-Dec ’04PPO and PDP regions defined: Oct-Dec ’04 Benchmark rates issued first Monday in April ’05Benchmark rates issued first Monday in April ’05 Health Plan RFPs due first Monday in June ’05Health Plan RFPs due first Monday in June ’05 New prescription drug benefit starts 1/1/06New prescription drug benefit starts 1/1/06

14. (in millions) * Breakout of internal vs. external revenue is not available prior to CY 2002 Internal Revenue External Revenue $340 $394 $403 $472 $661 $172 $239 $322 $231$232 $339 0 100 200 300 400 500 600 700 2000A*2001A*2002A2003A2004E Prescription Solutions Revenue Growth

15. (in millions) $296 $341 $328 $387 $543 24.8% $0 $100 $200 $300 $400 $500 $600 2000A2001A2002A2003A2004E 18.7% 20.3% 20.6% 25.0% 18.4% Mail Service Revenue & Mail Order Penetration

16. Best Disease Management Programs as Recognized by the Disease Management Association of America NCQA Accreditation: 99% of PacifiCare members are in Excellent- accredited plans Health Financing Innovator Award from the Foundation for Accountability Recent Honors and Recognition National Business Group on Health Award for Excellence and Innovation in Value Purchasing Innovators Award sponsored by Health Insurance Association of America

17. Room for P/E Multiple Expansion 2004 Average 2005 Average Comparison as of 8/27/04