It is customary in our annual reports to look to the future. This reflects the importance we attach to planning ahead and anticipating the needs of our members, our customers and, in a very real sense, the communities that CareFirst serves as an active corporate citizen.

Successfully negotiating the path to the future requires vision, experience, careful analysis and a will to make difficult decisions. The CareFirst Board of Directors and management team applied all of that and more as we considered how best to position the company for the future. The decision to align CareFirst with WellPoint Health Networks -- a highly respected national, for-profit company that also is part of the Blues family -- came after rigorous examination of all of the various options available to us. We sought expert guidance from objective and highly credible consultants – firms such as Credit Suisse First Boston, one of the world’s leading investment banking firms; Accenture, Ltd., a respected global consultant specializing in the areas of management and technology, and Piper Rudnick, LLP, a law firm with expertise in complex business transactions. We examined our company’s position in the marketplace, looked at the challenges ahead, evaluated our strengths and resources, and considered our options and solutions.

The CareFirst Board of Directors is confident that the decision to become a for-profit company and to proceed on a path leading toward merger is the optimal strategy in confronting the challenges we face in the marketplace. It is a course of action that serves the public interest and maintains the company’s position as the foremost health care company in the Mid-Atlantic region. Equally important, it ensures continuation of CareFirst’s local presence and long tradition of community service. CareFirst must change. And, with change, we see bright new possibilities for our company to participate in this new generation of health care.

Daniel J. Altobello
Chairman of the Board