HIP® Launches Consumer-directed Health Care Product
HIP's myFundTM Offers Quality Health Care at an Affordable Price

New York, N.Y., January 20, 2005 - HIP Health Plan of New York today announced the launch of its first consumer-directed health care plan, myFund. The product was developed to enable employers to offer their employees quality health care at a more affordable price.

HIP's myFund plan is designed to appeal to both small and large companies seeking new benefit plan solutions. The plan offers employers the advantage of significantly lower premiums than traditional health plans, but with a higher deductible-- a minimum $1,000 deductible for individuals and $2,000 for families. By linking with a myFund health reimbursement account (HRA), companies can help offset the cost of the deductible by 40% or 50% for their employees, depending on which option they choose. In addition, if an employee has met their deductible and still has money in their myFund account, those funds can be used to pay for any additional coinsurance costs associated with their health coverage.

HIP's myFund product, which is available for sale today, is an employer-funded account used with the HIP Select® Exclusive Provider Organization (EPO) or HIP Select® Preferred Provider Organization (PPO) health plans. Benefits are consistent with HIP's traditional EPO or PPO health plans. EPO members can see any physician in network without a referral. PPO participants require no referral in or out of network, but there is an additional member cost sharing for out-of-network services.

Daniel T. McGowan, President and Chief Operating Officer of HIP, noted: "Consumers and employers are becoming increasingly involved in cost decisions associated with medical services. That involvement, together with credible health information available through the Internet and other sources, and combined with rising health care costs, is driving greater awareness. HIP's consumer-directed health care plan, myFund, can satisfy the needs of consumers and employers. It is quality health care at an affordable price."

How myFundWorks
HIP utilizes an innovative, paperless claims environment to support the administrative process of the myFund HRA. The Select EPO or PPO plan linked to myFund has copayment, deductible and coinsurance requirements built into their plan design. Providers will generally submit claims directly to HIP on the member's behalf. HIP will then determine whether the service is covered by the member's plan and the amount owed to the provider is calculated. If the medical service is subject to a deductible, HIP will apply that deductible expense to the member's myFund account and automatically reimburse the provider directly for the amount owed, up to the member's account maximum. For instance, if a myFund member is hospitalized, the hospital generally submits a claim on behalf of the member. If the member is in the deductible period, their claim will automatically be processed through myFund without the member having to file a second claim. The member will receive an explanation of benefits indicating how much was paid to the provider from their myFund account as well as all amounts still owed. If a member has depleted all funds in their myFund account, they will receive a written explanation stating the amount owed to the hospital. If the member has any money remaining in their account at the end of a current plan year, it will be carried over to the new plan year.

For more information about HIP's myFund consumer-directed health care plan, contact your broker or consultant, or call 1-800-HIP-TODAY.

About Consumer-Directed Health Care Products
A consumer-directed health plan is a high deductible plan coupled with a health reimbursement account (HRA). The premium for a consumer-directed health plan is generally lower than conventional managed care plans. The HRA allows members to roll over unused dollars to the next plan year, which provides a financial incentive to be thoughtful when seeking care. The plan also attempts to reduce unnecessary health care resources. At the same time, consumer-directed health plans encourage consumers to seek routine well-care benefits, wellness, and preventive services that only require a co-payment and are not subject to the plan deductible.

About HIP
HIP Health Plan of New York is the largest HMO based on membership in New York City. HIP provides access to care in a variety of ways. Members have access to physicians in independent practice or at health centers. Large multi-specialty physician groups and health centers managed by some of New York's leading hospitals, including Beth Israel Medical Center, St. Luke's Hospital, Roosevelt Hospital, St. Barnabas Hospital, Lenox Hill Hospital and Montefiore Medical Center, afford members the convenience of receiving most of their care at a single location. HIP's expanding network of physicians includes 22,000 providers in over 33,000 locations, including more than 100 participating hospitals. For more information about HIP, please visit our Web site, hipusa.com®, now available in Spanish, Chinese and Korean as well as English.