1. Sierra Health Services, Inc. A Managed Care Company Updated 08/25/06

2. Cautionary Statement Statements in this presentation and verbal statements made by representatives of Sierra that are not historical facts are forward-looking and based on management’s projections, assumptions and estimates; actual results may vary materially. Forward-looking statements are subject to certain risks and uncertainties, which include but are not limited to: 1) 1)potential adverse changes in government regulations, contracts and programs, including the Medicare Advantage program, the Medicare Prescription Drug Plan and any potential reconciliation issues, Medicaid and legislative proposals to eliminate or reduce ERISA pre- emption of state laws that would increase potential managed care litigation exposure; 2) 2)competitive forces that may affect pricing, enrollment, renewals and benefit levels; 3) 3)unpredictable medical costs, malpractice exposure, reinsurance costs and inflation; 4) 4)impact of economic conditions; 5) 5)changes in healthcare reserves; and 6) 6)the amount of actual proceeds to be realized from the note receivable related to the sale of the workers’ compensation insurance operation. Further factors concerning financial risks and results may be found in documents filed with the Securities and Exchange Commission and which are incorporated herein by reference. Consequently, all of the forward-looking statements made in this presentation or verbally by representatives of Sierra are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Sierra will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Sierra or its business or operations. Sierra assumes no obligation to update publicly any such forward- looking statements, whether as a result of new information, future events or otherwise.

3. Disclosure Statement This presentation includes a non-Generally Accepted Accounting Principle (GAAP) measure –medical care ratio excluding PDP which under SEC Regulation G we are required to reconcile with GAAP. Reconciliation of this medical care ratio to GAAP is included in our earnings press release, which is available on www.sierrahealth.com. www.sierrahealth.com

4. Nevada Health Insurance Demographics (1) U.S. Census Bureau (2004) -Total Nevada Population = 2,390,000 (2) Nevada State Health Division, HMO Industry Profile 3/31/06

5. HMO Membership HMO Membership (in thousands) 272 292 330 365 9.9% CAGR 379

6. Commercial HMO Sales Growth Commercial HMO Members: 265,600 2006 Las Vegas Membership Growth: 10,700 Expect 6-9% Net Commercial Growth in 2006 Expect 6-9% Net Commercial Growth in 2006 Over 5% YTD through July Over 5% YTD through July +66% HMO Market Share in Nevada (1) +66% HMO Market Share in Nevada (1) 78% HMO Market Share in Las Vegas (1) 78% HMO Market Share in Las Vegas (1) Only 18% HMO Penetration Statewide (1) Only 18% HMO Penetration Statewide (1) Increasing Competition from PPO Offerings Increasing Competition from PPO Offerings (1) Nevada State Health Division, HMO Industry Profile 3/31/06 June 30, 2006

7. Health Plan of Nevada Membership Characteristics (1) Commercial Employer Group Size Commercial Employer Type Mix (1) Based on number of subscribers in each category June 30, 2006

8. Nevada Commercial Market Share (HMO) (1) (1) Nevada State Health Division, HMO Industry Profile March 31, 2004, 2005 and 2006

9. Commercial Costs 2006 Projected Cost Trends 2006 Projected Cost Trends Hospital 6 - 8% Hospital 6 - 8% Physician 4 - 5% Physician 4 - 5% Pharmacy 6 - 8% Pharmacy 6 - 8% Overall 6 - 7% Overall 6 - 7%

10. Commercial Pricing 2006 Projected Rate Increases 2006 Projected Rate Increases HMO4 – 6% HMO4 – 6% POS6 – 8% POS6 – 8% PPO6 – 8% PPO6 – 8% Overall (1) 5 – 7% Overall (1) 5 – 7% (1) Excludes benefit reductions (buydowns) which will increase the expected yield by approximately 1%-2%

11. Medicare Sales Growth Medicare HMO Members: 56,900 (6/30/06) Expect 4% or Better Net Medicare Growth for 2006 Expect 4% or Better Net Medicare Growth for 2006 Approximately 7% yield increase for 2006 Approximately 7% yield increase for 2006 + 64% Medicare Market Share Statewide + 64% Medicare Market Share Statewide and Las Vegas (1) Only 32% Medicare HMO Penetration Statewide (1) Only 32% Medicare HMO Penetration Statewide (1) (1) Nevada State Health Division, HMO Industry Profile 3/31/06

12. Nevada Medicare Market Share (HMO) (1) (1) Nevada State Health Division, HMO Industry Profile March 31, 2004, 2005 and 2006

13. Medicare Costs 2006 Projected Cost Trends 2006 Projected Cost Trends Hospital 4 - 6% Hospital 4 - 6% Physician 4 - 5% Physician 4 - 5% Pharmacy 14 - 16% Pharmacy 14 - 16% Overall 6 - 7% Overall 6 - 7%

14. Prescription Drug Plan – Part D  Stand-alone Prescription Drug Plan (PDP) - Sierra Health and Life - 10 states (8 regions) -NV, CA, AZ, UT, ID, OR, WA, CO, NM, TX -Auto-enrollment provider in all 8 regions

15. Prescription Drug Plan – Part D Marketing/Enrollment Marketing/Enrollment Low premiums, $1 generic co-pay and $250 brand name deductible Low premiums, $1 generic co-pay and $250 brand name deductible Enrollment ended May 15, 2006 for PDP Enrollment ended May 15, 2006 for PDP Beneficiaries “locked in” until next enrollment period for 2007 Beneficiaries “locked in” until next enrollment period for 2007 180,300 members June 2006 180,300 members June 2006 Continue to expect a pre-tax margin +4% on revenues of approximately $200 million for 2006 Continue to expect a pre-tax margin +4% on revenues of approximately $200 million for 2006 Year to date pre-tax income of approximately $1 million through June 30, 2006 Year to date pre-tax income of approximately $1 million through June 30, 2006 Expect pre-tax income of +$7 million for the remaining two quarters of 2006 Expect pre-tax income of +$7 million for the remaining two quarters of 2006

16. Medicaid Medicaid Members: 56,700 (6/30/06) +50% Medicaid HMO Market Share in Nevada (1) +50% Medicaid HMO Market Share in Nevada (1) Expect 4-6% Net Medicaid Growth for 2006 Expect 4-6% Net Medicaid Growth for 2006 2006 Rates 2006 Rates 0.9% rate decrease January 1, 2006 0.9% rate decrease January 1, 2006 2.6% rate increase July 1, 2006 2.6% rate increase July 1, 2006 Mandatory 2 Plan Market in Nevada Mandatory 2 Plan Market in Nevada Currently Serving CHiPS, TANF, CHAP Currently Serving CHiPS, TANF, CHAP (1) Nevada State Health Division, HMO Industry Profile 3/31/06

17. Nevada Medicaid Market Share (HMO) (1) (1) Nevada State Health Division, HMO Industry Profile March 31, 2004, 2005 and 2006

18. Medicaid Awarded new contract July 2006 Awarded new contract July 2006 Contract award was not appealed Contract award was not appealed Governor of the State of Nevada has signed the contract Governor of the State of Nevada has signed the contract New contract effective 11/1/06 through 6/30/09 with DHCFP option to extend the contract for an additional two years New contract effective 11/1/06 through 6/30/09 with DHCFP option to extend the contract for an additional two years State quality and performance audit scores of State quality and performance audit scores of 100% - 2004; 98% - 2002 and 2000

19. HPN Medicaid Revenue Growth 24.2% CAGR (in millions)

20. Medical Subsidiaries Clinical Overview Clinical Overview Medical Subsidiaries Family Healthcare Services (FHS) Family Home Hospice (FHH) Total Home Care of Nevada (THC) Behavioral Healthcare Options (BHO) Southwest Medical Associates (SMA) Multi-specialty physician group 250 Providers Provides care services in patient’s home Medicare certified home health agency Hospice servicing terminally ill patients Medicare certified Home care products, infusion therapy services, and specialty drugs DME Specialized mental health/substance abuse services. URAC accredited

21. Las Vegas/Marketplace Opportunities Future Growth Opportunities Future Growth Opportunities Population increase of 4-5% in 2006, now at 1.9 million Population increase of 4-5% in 2006, now at 1.9 million Census Bureau Estimate +114% Growth In 25 Years Census Bureau Estimate +114% Growth In 25 Years National average of 1% National average of 1% Mid Size Account Growth Mid Size Account Growth 65 new and expanded companies in Nevada in 2005 65 new and expanded companies in Nevada in 2005 Collectively employ nearly 2,000 workers Collectively employ nearly 2,000 workers Expected 1 year economic impact of $360 Million Expected 1 year economic impact of $360 Million Improving Medical Infrastructure Improving Medical Infrastructure New Acute Hospitals New Acute Hospitals New Cancer Research Facility New Cancer Research Facility New Alzheimers Facility New Alzheimers Facility

22. Medical Premium Revenue Trends Medical Premium Revenue Trends 14.4% CAGR ($ in millions) (1) Includes $49.7 million in PDP revenue (1)

23. Consolidated MCR

24. Consolidated MCR Excluding PDP

25. Consolidated Medical Expenses Twelve Months Ended 6/30/06

26. Consolidated Medical Expenses Excluding PDP (1) Twelve Months Ended 6/30/06 (1) Excludes PDP medical expenses of $95.2 million

27. 40.2% CAGR Managed Care and Corporate Operations Segment ($ in millions) Operating Income

28. Consolidated Pretax Margin Managed Care and Corporate Operations Segment

29. Cash and Investments Cash and Investments From Continuing Operations ($ in millions) $382.5 $337.8 $250.0 $388.6 $432.9

30. Return on Average Equity

31. Total External Debt From Continuing Operations ($ in millions)

32. Senior Convertible Debentures $115 MM original issue on March 15, 2003 $115 MM original issue on March 15, 2003 2.25% coupon rate 2.25% coupon rate Converted $63.5 million from May 19, 2005 Converted $63.5 million from May 19, 2005 through February 1, 2006 Issued 6.9 million shares upon conversion (1) Issued 6.9 million shares upon conversion (1) Expensed approximately $1.5 million in prepaid interest for Expensed approximately $1.5 million in prepaid interest for conversion in 2005 Expensed deferred financing costs of $1.2 million in 2005 Expensed deferred financing costs of $1.2 million in 2005 (1) Adjusted to reflect 2-for-1 stock split effective December 30, 2005

33. Stock Split Declared a 2-for-1 stock split on December 7, 2005 Declared a 2-for-1 stock split on December 7, 2005 In the form of a 100% stock dividend In the form of a 100% stock dividend Distributed and effective December 30, 2005 Distributed and effective December 30, 2005 Authorized shares increased to 120,000,000 with a $.005 par value Authorized shares increased to 120,000,000 with a $.005 par value Historical earnings per share results have been adjusted Historical earnings per share results have been adjusted Adjusted the conversion rate for outstanding debentures Adjusted the conversion rate for outstanding debentures Treasury shares were not impacted by this dividend Treasury shares were not impacted by this dividend

34. Managing Dilution (1) Managing Dilution (1) (shares in millions) 71.1 68.2 62.6 (1) Adjusted to reflect 2-for-1 stock split effective December 30, 2005 -6.2% CAGR

35. Share Repurchases from 1/1/03 (1) Repurchased 25.2 million shares as of 7/25/06 $20.45 average repurchase cost as of 7/25/06 Current bank agreement allows for unlimited share repurchases Based on meeting the required leverage ratio $64.4 million available as of 7/25/06 (1) Adjusted to reflect 2-for-1 stock split effective December 30, 2005

36. 2006 Strategic Objectives Solidify Regional Strength Solidify Regional Strength Continue to Gain Market Share Continue to Gain Market Share Continue to Expand Medical Delivery System Continue to Expand Medical Delivery System Implement Medicare Advantage Expansion, including Prescription Drug Program (Part D) Implement Medicare Advantage Expansion, including Prescription Drug Program (Part D) Achieve Commercial Premium Yields +5 to 7% before benefit buydowns Achieve Commercial Premium Yields +5 to 7% before benefit buydowns Achieve Commercial Unit Growth +6 to 9% Achieve Commercial Unit Growth +6 to 9% Achieve EPS of $2.10 to $2.18 Achieve EPS of $2.10 to $2.18

37. Sierra Health Services, Inc. A Managed Care Company Updated 08/25/06