CareFirst management has provided sound guidance in recent years, initiating better financial controls, introducing more competitive products, and improving service for customers and members. Through the affiliation of Blues Plans serving Maryland, Washington, D.C. and Delaware, CareFirst has emerged as the Mid-Atlantic’s leading regional health care provider with more than 3.1 million members and more than 6,500 associates. The company stands today as a regional leader – with enhanced ability to efficiently provide affordable, high quality health care.

But regional strength alone is not enough to ensure the future success of CareFirst. For-profit, national insurers bring with them a depth of resources that allows them to invest in new products, cost-saving technology, and new services. Because of resulting synergies, these organizations also operate on a scale that allows them to realize efficiencies that are unachievable for a regional company such as CareFirst. To effectively serve the region, CareFirst determined that it would need a strong, like-minded – and “Blue” – strategic partner.

Months of thoughtful analysis and a diligent review of the strategic options available to CareFirst led to the company’s decision to convert to for-profit status and be acquired by WellPoint. WellPoint has been repeatedly honored as one of the best and most admired health care companies in America. The company brings a commitment to locally managed and delivered health care, a reputation for innovation in products and services, and the resources to invest in making CareFirst even better.

CareFirst has filed an application to convert and be acquired by WellPoint with regulatory authorities in Maryland, Delaware and the District of Columbia. The review and approval process will be thorough and is expected to extend into 2003. We believe the benefits of this change at CareFirst are clear and compelling.