1. Banc of America Securities Health Care Conference May 21, 2004 The Four Seasons Hotel, Las Vegas 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 March 31, 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 735K 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 $350-$360

5. Free Cash Flow Growth Free cash flow is defined as net income plus depreciation and amortization, less capital expenditures Best measure of resources available at Parent to pay down debt, build statutory capital, pursue opportunistic acquisitions $270-$280 * Excludes cumulative effect of adoption of FAS 142 related to amortization of goodwill

6. Excess Statutory Capital At least 300% RBC in each core HMO state

7. Balance Sheet Strength Higher credit ratingsHigher credit ratings 100 bp reduction in bank term loan interest rate100 bp reduction in bank term loan interest rate $175 million reduction in debt in connection with Q403 clawback$175 million reduction in debt in connection with Q403 clawback Debt-to-capital ratio at 3/31/04 = 24% vs 39% at 12/31/02Debt-to-capital ratio at 3/31/04 = 24% vs 39% at 12/31/02

8. 2004 Guidance = 33% Pro Forma Net Income Growth

9. First Quarter 2004 Trends Net income up 45% from Q103, ex Q102 favorable reserve developmentNet income up 45% from Q103, ex Q102 favorable reserve development Commercial businessCommercial business Membership up 35K (2%) sequentially ; 3rd consecutive quarter of commercial membership growthMembership up 35K (2%) sequentially ; 3rd consecutive quarter of commercial membership growth CA membership up 6.5% year-over-yearCA membership up 6.5% year-over-year MLR down 130 basis points year-over-yearMLR down 130 basis points year-over-year Gross margin up 21% year-over-yearGross margin up 21% year-over-year Retention >90%Retention >90% Medicare+Choice businessMedicare+Choice business First sequential M+C membership growth in 3 yearsFirst sequential M+C membership growth in 3 years M+C MLR up 160 bp year-over-year, in line w/ guidanceM+C MLR up 160 bp year-over-year, in line w/ guidance SG&A up 30 bp year-over-yearSG&A up 30 bp year-over-year

10. 2004 Membership & Pricing Trends Expect 5%-6% commercial membership increase in 2004Expect 5%-6% commercial membership increase in 2004 Commercial premiums up 11%, over cost trends of 9.5% (after benefit adjustment)Commercial premiums up 11%, over cost trends of 9.5% (after benefit adjustment) premiums up 12% excluding FEHP account, with a 9% benefit buydownpremiums up 12% excluding FEHP account, with a 9% benefit buydown

11. 2005 Guidance 18% net income growth from 2004 18% net income growth from 2004 $350-$360 million in net income $350-$360 million in net income Estimated weighted average shares outstanding = 97.5 millionEstimated weighted average shares outstanding = 97.5 million

12. Grow Commercial Business Through Consumer-Aligned Health Plans Introduced more than 20 new products/services over last 2 years, including PPO products and Self-Directed Health Plans Re-entered individual & small group markets w/ significant success Continuing our successful advertising/branding campaign Maintaining focus on superior member satisfaction & customer service Build Senior Solutions Products/ Distribution Medicare+Choice: evolve to managed growth & avoid “benefit wars” Medicare Supplement- expansion of broker network Disease Mgmt. for fee-for-service beneficiaries- government’s PPO alternative Expand PBM & Behavioral Membership Leverage core competencies to generate unaffiliated membership growth Superior business model as option to independent PBMs Small acquisitions to strengthen product offerings Strategy for Profit Growth