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WellPoint Responds to California State Treasurer

THOUSAND OAKS, Calif.--(BUSINESS WIRE)--June 14, 2004--WellPoint Health Networks (NYSE:WLP) today released the following letter to the California State Treasurer regarding the WellPoint/Anthem merger.

WellPoint Health Networks Inc. serves the health care needs of more than 15.3 million medical members and approximately 46 million specialty members nationwide through Blue Cross of California, Blue Cross Blue Shield of Georgia, Blue Cross Blue Shield of Missouri, Blue Cross Blue Shield of Wisconsin, HealthLink and UNICARE. Visit WellPoint on the web at www.wellpoint.com. Blue Cross of California, Blue Cross Blue Shield of Georgia, Blue Cross Blue Shield of Missouri and Blue Cross Blue Shield of Wisconsin are independent licensees of the Blue Cross and Blue Shield Association.


June 14, 2004

Philip Angelides
California State Treasurer
915 Capitol Mall, Room 110
Sacramento, CA  95814

Dear Mr. Angelides:

    We would like to add some clarity to the discussion of the
WellPoint/Anthem merger and correct significant misinformation
surrounding executive compensation related to the merger.

    --  Anthem, not California health insurance customers, will fund
        any payouts to WellPoint executives as a result of the merger.
        Therefore, as you correctly state, this is a shareholder issue
        and shareholders will vote whether to approve the merger on
        June 28.

    --  WellPoint's executive compensation program, including
        change-in-control severance benefit and stay bonuses, that was
        adopted by the Board of Directors based on independent expert
        advice, has been in place for years, has been fully disclosed
        and is consistent with market practice.

    --  Anthem has testified that it expects to retain most of the
        WellPoint executives so that actual costs are estimated to be
        about $200 million of the $300 million in total estimated
        closing costs. Only if every executive left the Company, would
        maximum aggregate severance costs be $356 million.

    --  These transaction costs, low in percentage terms versus other
        mergers, will be paid by Anthem and will be more than offset
        by annual savings of $250 million (after two years) in reduced
        administrative expenses and corporate duplication. To put this
        in perspective, 10 years after the merger closes, over $2.0
        billion will be achieved in savings, versus the one-time
        severance costs of $200 million.

    --  The $251 million in unvested options is not new money related
        to the merger - it has been earned by WellPoint executives
        through years of meeting customer needs and the resulting
        appreciation in the Company's stock price. These options only
        become exercisable on an accelerated schedule if an executive
        is terminated.

    --  Since 1993 when WellPoint went public, the Company has created
        approximately $20 billion in shareholder returns from stock
        price growth and a dividend. These returns funded charitable
        foundations in California with $4.1 billion in current assets
        and five other foundations outside California with an
        additional $3 billion in current assets.

    --  Since the IPO in 1993, WellPoint has competed successfully in
        the Calfornia marketplace, growing its membership internally
        from 2.3 million members to over 7 million today. This
        reflects the Company's ability to provide innovative products
        and services that customers want.

    --  WellPoint's success has allowed the Company to create over
        5,700 new jobs in California and many more nationally.

    --  California consumers will benefit from the WellPoint/Anthem
        merger in many ways; including:

        --  Blue Cross of California, WellPoint's operating unit in
            the state, will remain financially strong and able to
            finance member care.

        --  By spreading administrative costs over a wider base, the
            Company will be more efficient and better able to keep
            premiums affordable.

        --  Through significant investments in information technology,
            consumers and physicians will have better information to
            make health care decisions to improve outcomes.

        --  The new entity will be better positioned to control
            pharmaceutical costs.

    --  We have worked with California regulators in good faith and
        believe they have strong powers to enforce any promises made
        to California consumers regarding this merger.

    --  The stock market in aggregate has evaluated the benefits of
        this merger to customers and shareholders have significantly
        bid up the prices of both WellPoint and Anthem shares since
        the merger was announced in October 2003.

    We welcome the opportunity to discuss these issues further.

Sincerely,

David C. Colby
Executive Vice President
Chief Financial Officer
WellPoint

    CONTACT: WellPoint Health Networks
             Ken Ferber, 805-557-6794 (Media)
             John Cygul, 805-557-6789 (Investors)

    SOURCE: WellPoint Health Networks
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