Coventry Health Care Announces Approval of Medicare Contracts

Press Release from BusinessWire



BETHESDA, Md.--(BUSINESS WIRE)--Sept. 23, 2005--Coventry Health Care, Inc. (NYSE:CVH) announced today that its 2006 Medicare Advantage and Medicare Part D filed products have been approved by the Centers for Medicare and Medicaid Services (CMS).





Medicare Advantage



Coventry, marketed as Advantra(R), will continue to offer Medicare Advantage products in its Western Pennsylvania, West Virginia, St. Louis and Kansas City markets where Coventry currently serves approximately 74,000 members. Coventry will also offer Medicare Advantage products in three new markets introduced in 2005: Iowa, Central Pennsylvania and Wichita, Kansas. Coventry will offer a broad range of HMO and PPO products including $0 premium products that incorporate the Part D drug benefit in all markets.



Medicare Prescription Drug Coverage



Coventry has received approval to offer its Part D Prescription Drug Plans (PDP) in all 34 regions. Coventry also qualified in all 13 regions where it sought to participate in the auto assignment of low income beneficiaries. The PDP plans will be marketed under the brand names of AdvantraRx and First Health(R) Premier and include options with first dollar coverage (no deductible). The AdvantraRx Value product provides affordable monthly premiums ranging from $18.24 to $25.19 depending upon the geographic region where the individual resides. In addition, Advantra Rx Premier plans offer enriched benefits and low co-pay options with monthly premiums ranging from below $30.00 to $50.48, again depending upon the geographical region where the individual resides. Nearly 60,000 of the nation's retail pharmacies are participating with Coventry providing beneficiaries convenient access to prescription medications.



The Part D program, created as part of the government's Medicare Modernization Act of 2003, will take effect January 1, 2006. Coventry will offer Medicare Part D prescription drug plans on a nationwide basis. In accordance with CMS guidelines, Coventry will begin marketing these products beginning October 1, 2005. Products will be underwritten by Coventry Health and Life Insurance Company, First Health Life and Health Insurance Company and Cambridge Life Insurance Company.



Coventry has established partnerships with Medicare Supplement insurance carriers and brokerage channels nationwide to provide Medicare Part D prescription drug products to Medicare beneficiaries. To date, exclusive distribution agreements have been signed with Mutual of Omaha Insurance Company, Conseco Inc. (Conseco Insurance Group and Bankers Life and Casualty Company), Ceres Group, Inc., Continental Life Insurance Company, New Era Life Insurance Company and its affiliates (New Era Life Insurance Company of the Midwest and Philadelphia American Life Insurance Company), and United Teacher Associates Insurance Company (an affiliate of Great American Life Insurance Company).



"These companies have a demonstrated track record of success in distributing products and services to seniors and we are pleased to partner with them to offer prescription drug plans to Medicare beneficiaries," said Dale B. Wolf, Chief Executive Officer of Coventry. "While our ultimate enrollment in our Part D offering through these partnerships is uncertain, these carriers represent more than one million Medicare Supplement policies in force today. Distribution partnerships such as these, along with our other marketing efforts, including other non-exclusive broker distribution arrangements and our previously announced non-exclusive relationship with Rite Aid Corp., should position us well for 2006 and beyond."



Regions in which Coventry is eligible for auto-assignees:



-- Northern New England (New Hampshire, Maine)



-- New York



-- New Jersey



-- Mid-Atlantic States (Maryland, Delaware, District of Columbia)



-- Pennsylvania / West Virginia



-- Virginia



-- South Carolina



-- Alabama / Tennessee



-- Michigan



-- Ohio



-- Indiana / Kentucky



-- Missouri



-- Nevada



This press release may contain forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, relating to future events or future financial performance. Actual performance may be significantly impacted by certain risks and uncertainties, including those described in Coventry's Annual Report on Form 10-K for the year ended December 31, 2004.