HIP to Acquire PerfectHealth Insurance Company

NEW YORK, Aug. 22 /PRNewswire/ -- HIP Health Plan of New York has entered

into an acquisition agreement with PerfectHealth Insurance Company, a provider

of high deductible health insurance policies in the New York market.

Completion of the transaction is subject to regulatory approval.

HIP, a leading regional health plan serving the needs of over 1.4 million

members, recently launched its first consumer-directed health plan (CDHP),

myFund. The purchase of PerfectHealth recognizes the growing interest in

consumer-directed health care options. In addition, the acquisition will

expand the scope of HIP's CDHP product line through the provision of Health

Reimbursement Account (HRA) and Health Savings Account (HSA) offerings.

Daniel T. McGowan, President and Chief Operating Officer of HIP, noted:

"Increasingly, consumers wish to be involved in the decisions that affect

their health care. This fact, coupled with the access consumers now have to

health care information through the Internet and from other sources, is

driving their awareness about their health care options. With the acquisition

of PerfectHealth, which has extensive knowledge of HSAs in our market, HIP

expects to be able to meet the needs of employers and employees wishing to

purchase higher-deductible, lower-premium products coupled with HSAs."

Carmine A. Morano, President & CEO of PerfectHealth, said: "PerfectHealth

is pleased to join the HIP organization in designing products and services to

meet the evolving needs of consumers. We were the first insurance company to

offer HSA plans in the New York market and have long recognized the value of

HSAs in affording the consumer the option to be judicious when choosing care.

HSAs transform users of health care into consumers of health care. With the

strength and resources of HIP, we look forward to driving the future of this

product."



About Consumer-Directed Health Care Products

A CDHP is a high-deductible plan coupled with an HRA or HSA. The premium

for a CDHP is generally lower than for a conventional managed care plan. The

HSA allows members to roll over unused dollars to the next plan year, which

provides a financial incentive for them to be thoughtful when seeking care.

The HSA is funded with pre-tax dollars or tax-deductible contributions. Funds

can come from employers, employees or both and can be rolled over yearly and

earn interest. All funds, including any employer contributions, are portable

and controlled by the employees. CDHPs also attempt to reduce the unnecessary

use of health care resources and to encourage people to seek routine well-care

benefits and wellness and preventive services that require only a co-payment

and are not subject to the plan's deductible.