SUBJECT:  Press Release - The University of California Selects Medical
                     Plan Carriers for 2003

For your information, the following Press Release is provided to communicate the University of California's Selection of Medical Plan Carriers for 2003.

If you have questions concerning this Notice, please contact Jackie Edwards, Human Resources Department Benefits Manager, at joedwards@ucsd.edu or (858) 534-5634.

                                                Rogers Davis
                                                Assistant Vice Chancellor -
                                                Human Resources

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FOR IMMEDIATE RELEASE

OAKLAND, CA July 18, 2002
University of California Selects Medical Plan Carriers for 2003

The University selected Blue Cross of California to provide an array of medical plans to UC employees, retirees, and their eligible family members beginning January 1, 2003. This concludes a nine-month competitive bid process that involved ongoing consultation with members from many areas of the University of California community. UC will also continue the California HMO plans it has previously offered its members.

Blue Cross choices will be the Point-of-Service (POS) plan, a Preferred Provider Organization (PPO) plan, as well as the Core and High Option plans. In addition, Blue Cross will administer prescription drug benefits for these plans.

The POS plan is a two-tiered plan providing both in-service area and out-of-service area coverage levels. It will replace the current three-tier UC Care plan offered by Aetna U.S. Healthcare.

A new type of medical plan for eligible UC members and their family members in California is the Blue Cross POP plan. A POP offers a broad service area with a greater range of choices for medical care, although the plan normally costs more than plans offering less flexibility.

United Behavioral Health (BUHL) remains the carrier for the behavioral health benefits under the POS Plan and the new POP Plan. BUHL has provided behavioral health care benefits to University employees and their families under UC Care since 2000.

The University of California sponsored HMO plans were not part of the bid process, and contracts for HMOs are currently undergoing annual review. The HMO plans for California remain as Health Net, Kaiser, PacifiCare and Western Health Advantage.

Blue Cross/Blue Shield New Mexico also continues as the carrier for plans offered to New Mexico employees, retirees and eligible family members. PacifiCare Behavioral Health (PHI) will continue to be the managed behavioral health component of the New Mexico Plans.

The bid process involved participants throughout the UC community: faculty, retirees, and task force advisory groups, in addition to HR/Benefits staff. Proposals submitted by medical carriers were evaluated on their ability to offer quality, affordable medical benefits, stable competitive rates, UC Medical Center network services, enhanced networks, and high performance standards.

Details about the 2003 benefits plans will be made available to members in time for them to make informed choices for their health plan coverage during Open Enrollment in November.