Fitch Ratings Places PacifiCare on Rating Watch Positive

Business Wire, July 7, 2005

CHICAGO -- Fitch Ratings has placed PacifiCare Health Systems Inc.'s (PacifiCare) debt ratings on Rating Watch Positive, affecting approximately $1.1 billion of debt outstanding. The Rating Watch Positive placement follows PacifiCare's announcement that it will be acquired by UnitedHealth Group, Inc. (UNH) in a transaction valued at approximately $9 billion. UNH (senior debt rated 'A'; Outlook Stable by Fitch) is a leading health care services company with total medical membership of 23.1 million.

The rating action reflects Fitch's view that the proposed acquisition by UNH will significantly improve PacifiCare's financial position and operating profile. PacifiCare's current ratings have been based, in part, on the company's comparatively weaker balance sheet fundamentals and limited business profile. Fitch expects that PacifiCare's ratings will be upgraded upon close of the transaction, which is expected to occur in the first quarter of 2006. Following the close of the transaction, Fitch expects UNH to retire all of PacifiCare's outstanding debt.

The proposed acquisition of PacifiCare significantly strengthens UNH's competitive position in California managed care market and the Medicare business seeing as approximately 1.8 million, or 57% of PacifiCare's 3.2 million members are located in California, a state where UnitedHealth has historically lacked a competitive market share.

PacifiCare's provider network within the state of California will be of significant value to UnitedHealth, which currently gains use of a provider network through a network access agreement with Blue Shield of California. In addition, UnitedHealth will be acquiring the second largest player in the Medicare Advantage program. PacifiCare will add 716,000 Medicare Advantage members to UnitedHealth's existing 345,000 of Medicare Advantage membership, and will give an additional boost to UnitedHealth's plans to participate in the Medicare drug benefit beginning in 2006.

The following ratings are placed on Rating Watch Positive by Fitch:

PacifiCare Health Systems, Inc.:

--Long-term 'BB ';

--10.75% senior unsecured notes due 2009 'BB ';

--Bank loan 'BB '.

--3% convertible subordinated debentures 'BB'.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.