

                MEDICARE MANAGED CARE CONTRACT REPORT
                      (DATA AS OF DECEMBER 01, 1996)

      ATTACHED FOR YOUR INFORMATION IS A SUMMARY OF STATISTICS REGARDING
      MEDICARE CONTRACTS WITH PREPAID ORGANIZATIONS.

      CURRENT CONTRACT SUMMARY:     NUMBER OF PLANS          ENROLLEES
      ------------------------      ---------------          ---------
         TOTAL PREPAID CONTRACTS         336                 4,787,955
             RISK (INCLUDES 0 DCGS)      241                 4,115,293
             COST                         36                   195,758
             OTHER DEMOS                   9                    44,959
             HCPPS                        50                   431,945

      PAYMENT STATISTICS:
      ------------------
         $1915M   TOTAL PAYMENT MADE TO ALL PREPAID PLANS FOR DECEMBER 1996
         $5632M   FISCAL YEAR TO DATE

      ENROLLMENT STATISTICS
      ---------------------
             RISK ENROLLMENT CHANGED FROM  4,058,042 IN NOVEMBER
                  TO  4,115,293 IN DECEMBER OR 1.4% INCREASE.
             TOTAL ENROLLMENT CHANGED FROM  4,714,291 IN NOVEMBER
                   TO  4,787,955 IN DECEMBER OR 1.6% INCREASE.

      CHANGES SINCE NOVEMBER 01, 1996 REPORT:
      -------------------------------------

             2 RISK CONTRACTS WERE SIGNED:
               PHYSICIANS HEALTH SERVICE OF CT., INC., TRUMBULL,CT
               MDLI HEALTHCARE, INC., MELVILLE,NY
               MCARE, ANN ARBOR, MI

             2 PLANS EXPANDED THEIR SERVICE AREA:
               HEALTH PARTNERS OF ALABAMA, INC. , BIRMINGHAM, AL
               LIFEGUARD, INC. , MILPITAS, CA

      PENDING APPLICATIONS
      --------------------
            69 RISK PLANS
             4 COST
            19 OTHER DEMOS

      PENDING SERVICE AREA EXPANSIONS
      -------------------------------
            24 RISK
             1 COST

      THIS REPORT WILL BE UPDATED BY THE TENTH OF EACH MONTH.
      IF YOU HAVE ANY QUESTIONS, PLEASE CALL (410) 786-1111.
      PREPARED BY: OFFICE OF MANAGED CARE,
                   HEALTH CARE FINANCING ADMINISTRATION.

                                                  ENROLLMENT AND PAYMENT SUMMARY
                                                  ------------------------------
                                                      (AS OF  DECEMBER 01, 1996)

 MEDICARE HMO/CMP DATA
 ---------------------
                                                                   PAYMENT       DEC, 96     YR TO DATE     DEC, 96
                                                        DEC, 96    FISCAL YR     INTERIM       INTERIM      TOTAL
                              NUMBER OF   NUMBER OF     PAYMENT    TO DATE       PAYMENT       PAYMENT      PAYMENT
 TYPE OF CONTRACT             CONTRACTS   ENROLLEES   (MILLIONS)  (MILLIONS)*  (MILLIONS)**  (MILLIONS)   (MILLIONS)
 ----------------             ---------   ---------   ----------  ----------   ----------    ----------   ----------

      TEFRA RISK    1/           241      4,115,293     $1,792.6    $5,285.5         $0.0          $0.0     $1,792.6
      DEMOS                        9         44,959        $28.9       $60.8         $0.0          $0.0        $28.9
                                 ---      ---------       ------    --------      -------       -------      -------
        SUBTOTAL                 250      4,160,252     $1,821.5    $5,346.3         $0.0          $0.0     $1,821.5

      TEFRA COST    2/            36        195,758        $34.6      $107.5         $0.0          $2.2        $34.6
                                 ---      ---------       ------    --------      -------       -------      -------

        SUBTOTAL HMO/CMP         286      4,356,010     $1,856.1    $5,453.8         $0.0          $2.2     $1,856.1

      HCPP PART B   3/            50        431,945        $59.3      $178.4         $0.0         $25.0        $59.3
                                 ---      ---------       ------    --------      -------       -------      -------
 TOTAL                           336      4,787,955     $1,915.4    $5,632.2         $0.0         $27.2     $1,915.4


 _________________________________________________________________________________________________________________

 1/  INCLUDES 4 CONTRACTS WHICH HAVE BEEN SIGNED, BUT FOR WHICH NO PAYMENT HAS YET BEEN MADE FOR DECEMBER 1996.
     ALSO INCLUDES 0 DCGS.

 2/  INCLUDES 4 PLANS WITH TEFRA RISK CONTRACTS WHICH HAVE ENROLLEES STILL BEING PAID UNDER THE COST METHODS.

 3/  INCLUDES ENROLLMENT FROM 16 HCPPS WHICH HAVE SIGNED RISK CONTRACTS.

 *   INCLUDES CURRENT MONTH.

 **  REPORTS SPECIAL, NON MONTHLY RECONCILIATION PAYMENTS

                           SUMMARY OF RISK/COST/HCPP CONTRACTS
                                       BY CATEGORY
                                 (AS OF   DECEMBER 01, 1996)
                           -----------------------------------

 TEFRA RISK CONTRACTS
 --------------------
                                NUMBER OF                NUMBER OF
                                CONTRACTS      (%)       ENROLLEES       (%)
                                ---------      ---       ---------       ---
      MODEL
      -----
          IPA                      171         71        2,550,047        62
          GROUP                     50         21          816,861        20
          STAFF                     20          8          748,385        18

      OWNERSHIP
      ---------
          PROFIT                   170         71        2,838,315        69
          NON PROFIT                71         29        1,276,978        31
 ___________________________________________________________________________

 TEFRA COST CONTRACTS*
 ---------------------
                                NUMBER OF                NUMBER OF
                                CONTRACTS      (%)       ENROLLEES       (%)
                                ---------      ---       ---------       ---
      MODEL
      -----
          IPA                       16         46          139,716        75
          GROUP                     10         29           21,452        12
          STAFF                      9         25           24,258        13

      OWNERSHIP
      ---------
          PROFIT                    11         31           29,165        15
          NON PROFIT                25         69          163,453        85


 *DOES NOT INCLUDE COST ENROLLEES REMAINING IN RISK PLANS.
                           SUMMARY OF RISK/COST/HCPP CONTRACTS
                                       BY CATEGORY
                                 (AS OF   DECEMBER 01, 1996)
                           -----------------------------------
 HCPP CONTRACTS
 --------------
                                NUMBER OF                NUMBER OF
                                CONTRACTS      (%)       ENROLLEES       (%)
                                ---------      ---       ---------       ---
      MODEL
      -----
          IPA                        8         16           62,329        21
          GROUP                     34         68          187,710        64
          STAFF                      4          8           17,345         6
          UNION                      2          4           21,673         7
          EMPLOYER GROUP             1          2            2,808         1
          MEDICAL GROUP              0          0                0         0
          PUBLIC HMO                 0          0                0         0
          STATE LICENSED HMO         0          0                0         0
          OTHER                      1          2            2,401         1

      OWNERSHIP
      ---------
          PROFIT                    10         20           49,401        17
          NON PROFIT                39         80          242,464        83

                             MEDICARE PREPAID OPERATIONS
                             ---------------------------

                                      POST-TEFRA
                                  (AS OF  DEC 1996)
                                  -----------------

 RUN DATE: 12/02/96

                                       # PLANS                   # ENROLLEES
                                       -------                   -----------

 TEFRA RISK                              241                       4,115,293

 OLD RISK                                  0                               0

 COST BASIS                               36                         195,758

 DEMO                                      9                          44,959
                                         ---                      ----------

   TOTAL HMO                             286                       4,356,010


 HCPPS & GPPPS                            48                         431,945
                                         ---                      ----------

   TOTAL PREPAID                         334                       4,787,955

     MEDICARE ENROLLEE DISTRIBUTION BY STATE AS OF DECEMBER 01, 1996



                                                                                                    TEFRA RISK
                                 TOTAL         MEDICARE        MEDICARE        TEFRA RISK            ENROLLEES
                               POPULATION        BENES           BENES         ENROLLEES              AS % OF
                               IN THOUS.       IN THOU         PERCENT          DECEMBER              MEDICARE
     STATE                     12/31/95 *      09/01/95        TOTAL POP         1996                   BENES
     ---------------------------------------------------------------------------------------------------------

     ALABAMA                      4,253             655            15              21,228                  3
     ALASKA                         604              35             6                   0                  0
     ARIZONA                      4,218             613            15             208,534                 34
     ARKANSAS                     2,484             431            17               4,898                  1
     CALIFORNIA                  31,589           3,701            12           1,305,254                 35
     COLORADO                     3,747             431            12              94,876                 22
     CONNECTICUT                  3,275             511            16              12,010                  2
     DELAWARE                       717             103            14                   0                  0
     DISTRICT OF COLUMBIA           554              79            14               9,804                 12
     FLORIDA                     14,166           2,667            19             573,460                 22
     GEORGIA                      7,201             851            12               5,072                  1
     HAWAII                       1,187             152            13              14,153                  9
     IDAHO                        1,163             153            13                   0                  0
     ILLINOIS                    11,830           1,645            14             102,259                  6
     INDIANA                      5,803             838            14               3,740                  0
     IOWA                         2,842             482            17                   0                  0
     KANSAS                       2,565             390            15               1,520                  0
     KENTUCKY                     3,860             600            16               8,195                  1
     LOUISIANA                    4,342             591            14              51,742                  9
     MAINE                        1,241             206            17                   0                  0
     MARYLAND                     5,042             613            12              42,441                  7
     MASSACHUSETTS                6,074             949            16             135,178                 14
     MICHIGAN                     9,549           1,373            14              17,934                  1
     MINNESOTA                    4,610             642            14              60,162                  9
     MISSISSIPPI                  2,697             406            15                   0                  0
     MISSOURI                     5,324             848            16              70,939                  8
     MONTANA                        870             132            15                   0                  0
     NEBRASKA                     1,637             253            15               5,548                  2
     NEVADA                       1,530             198            13              40,241                 20
     NEW HAMPSHIRE                1,148             159            14                   0                  0
     NEW JERSEY                   7,945           1,189            15              77,169                  6
     NEW MEXICO                   1,685             216            13              36,037                 17
     NEW YORK                    18,136           2,685            15             260,690                 10
     NORTH CAROLINA               7,195           1,050            15               1,743                  0
     NORTH DAKOTA                   641             105            16                   0                  0
     OHIO                        11,151           1,696            15              80,337                  5
     OKLAHOMA                     3,278             496            15              25,939                  5
     MEDICARE ENROLLEE DISTRIBUTION BY STATE AS OF DECEMBER 01, 1996



                                                                                                    TEFRA RISK
                                 TOTAL         MEDICARE        MEDICARE        TEFRA RISK            ENROLLEES
                               POPULATION        BENES           BENES         ENROLLEES              AS % OF
                               IN THOUS.       IN THOU         PERCENT          DECEMBER              MEDICARE
     STATE                     12/31/95 *      09/01/95        TOTAL POP         1996                   BENES
     ---------------------------------------------------------------------------------------------------------

     OREGON                       3,141             476            15             128,945                 27
     PENNSYLVANIA                12,072           2,104            17             327,605                 16
     RHODE ISLAND                   990             171            17              21,282                 12
     SOUTH CAROLINA               3,673             520            14               2,672                  1
     SOUTH DAKOTA                   729             118            16                   0                  0
     TENNESSEE                    5,256             787            15               2,347                  0
     TEXAS                       18,724           2,124            11             205,741                 10
     UTAH                         1,951             191            10              11,877                  6
     VERMONT                        585              85            15                   0                  0
     VIRGINIA                     6,618             835            13               5,692                  1
     WASHINGTON                   5,431             701            13             128,091                 18
     WEST VIRGINIA                1,828             335            18                   0                  0
     WISCONSIN                    5,123             775            15               4,182                  1
     WYOMING                        480              62            13                   0                  0


     TOTAL                      262,754          37,428            14           4,109,537                 11


     * DATA FROM THE U.S. DEPARTMENT OF COMMERCE

     MEDICARE ENROLLEE DISTRIBUTION BY STATE AS OF DECEMBER 01, 1996



                                                                                                        COST
                                 TOTAL         MEDICARE        MEDICARE           COST               ENROLLEES
                               POPULATION        BENES           BENES          ENROLLEES             AS % OF
                               IN THOUS.       IN THOU         PERCENT           DECEMBER             MEDICARE
     STATE                     12/31/95 *      09/01/95        TOTAL POP          1996                  BENES
     ---------------------------------------------------------------------------------------------------------

     ALABAMA                      4,253             655            15                   0                  0
     ALASKA                         604              35             6                   0                  0
     ARIZONA                      4,218             613            15                   0                  0
     ARKANSAS                     2,484             431            17                   0                  0
     CALIFORNIA                  31,589           3,701            12               1,031                  0
     COLORADO                     3,747             431            12              15,576                  4
     CONNECTICUT                  3,275             511            16               9,707                  2
     DELAWARE                       717             103            14                   0                  0
     DISTRICT OF COLUMBIA           554              79            14                   0                  0
     FLORIDA                     14,166           2,667            19               2,633                  0
     GEORGIA                      7,201             851            12                   0                  0
     HAWAII                       1,187             152            13              31,545                 21
     IDAHO                        1,163             153            13                   0                  0
     ILLINOIS                    11,830           1,645            14               4,526                  0
     INDIANA                      5,803             838            14               4,036                  0
     IOWA                         2,842             482            17                  84                  0
     KANSAS                       2,565             390            15                   0                  0
     KENTUCKY                     3,860             600            16                   0                  0
     LOUISIANA                    4,342             591            14                   0                  0
     MAINE                        1,241             206            17                   0                  0
     MARYLAND                     5,042             613            12                   0                  0
     MASSACHUSETTS                6,074             949            16                   0                  0
     MICHIGAN                     9,549           1,373            14                   0                  0
     MINNESOTA                    4,610             642            14                   0                  0
     MISSISSIPPI                  2,697             406            15                   0                  0
     MISSOURI                     5,324             848            16                   0                  0
     MONTANA                        870             132            15                   0                  0
     NEBRASKA                     1,637             253            15                   0                  0
     NEVADA                       1,530             198            13                   0                  0
     NEW HAMPSHIRE                1,148             159            14                   0                  0
     NEW JERSEY                   7,945           1,189            15               5,443                  0
     NEW MEXICO                   1,685             216            13                   0                  0
     NEW YORK                    18,136           2,685            15              33,938                  1
     NORTH CAROLINA               7,195           1,050            15               2,148                  0
     NORTH DAKOTA                   641             105            16                 724                  1
     OHIO                        11,151           1,696            15                 994                  0
     OKLAHOMA                     3,278             496            15                   0                  0
     MEDICARE ENROLLEE DISTRIBUTION BY STATE AS OF DECEMBER 01, 1996



                                                                                                        COST
                                 TOTAL         MEDICARE        MEDICARE           COST               ENROLLEES
                               POPULATION        BENES           BENES          ENROLLEES             AS % OF
                               IN THOUS.       IN THOU         PERCENT           DECEMBER             MEDICARE
     STATE                     12/31/95 *      09/01/95        TOTAL POP          1996                  BENES
     ---------------------------------------------------------------------------------------------------------

     OREGON                       3,141             476            15              46,851                 10
     PENNSYLVANIA                12,072           2,104            17                   0                  0
     RHODE ISLAND                   990             171            17               2,375                  1
     SOUTH CAROLINA               3,673             520            14                   0                  0
     SOUTH DAKOTA                   729             118            16                   0                  0
     TENNESSEE                    5,256             787            15                   0                  0
     TEXAS                       18,724           2,124            11              11,574                  1
     UTAH                         1,951             191            10                   0                  0
     VERMONT                        585              85            15               1,142                  1
     VIRGINIA                     6,618             835            13                   0                  0
     WASHINGTON                   5,431             701            13              12,289                  2
     WEST VIRGINIA                1,828             335            18               7,734                  2
     WISCONSIN                    5,123             775            15                 769                  0
     WYOMING                        480              62            13                   0                  0


     TOTAL                      262,754          37,428            14             195,119                  1


     * DATA FROM THE U.S. DEPARTMENT OF COMMERCE

     MEDICARE ENROLLEE DISTRIBUTION BY STATE AS OF DECEMBER 01, 1996



                                                                                                        HCPP
                                 TOTAL         MEDICARE        MEDICARE           HCPP               ENROLLEES
                               POPULATION        BENES           BENES          ENROLLEES             AS % OF
                               IN THOUS.       IN THOU         PERCENT           DECEMBER             MEDICARE
     STATE                     12/31/95 *      09/01/95        TOTAL POP          1996                  BENES
     ---------------------------------------------------------------------------------------------------------

     ALABAMA                      4,253             655            15                   0                  0
     ALASKA                         604              35             6                   0                  0
     ARIZONA                      4,218             613            15                   0                  0
     ARKANSAS                     2,484             431            17                   0                  0
     CALIFORNIA                  31,589           3,701            12              99,370                  3
     COLORADO                     3,747             431            12               1,565                  0
     CONNECTICUT                  3,275             511            16               2,603                  1
     DELAWARE                       717             103            14                   0                  0
     DISTRICT OF COLUMBIA           554              79            14               5,941                  8
     FLORIDA                     14,166           2,667            19               4,070                  0
     GEORGIA                      7,201             851            12               2,941                  0
     HAWAII                       1,187             152            13               3,200                  2
     IDAHO                        1,163             153            13                   0                  0
     ILLINOIS                    11,830           1,645            14              34,599                  2
     INDIANA                      5,803             838            14               5,139                  1
     IOWA                         2,842             482            17               8,613                  2
     KANSAS                       2,565             390            15               8,519                  2
     KENTUCKY                     3,860             600            16                   0                  0
     LOUISIANA                    4,342             591            14                   0                  0
     MAINE                        1,241             206            17                   0                  0
     MARYLAND                     5,042             613            12               6,888                  1
     MASSACHUSETTS                6,074             949            16              12,888                  1
     MICHIGAN                     9,549           1,373            14                 714                  0
     MINNESOTA                    4,610             642            14              54,736                  9
     MISSISSIPPI                  2,697             406            15                   0                  0
     MISSOURI                     5,324             848            16               7,014                  1
     MONTANA                        870             132            15                   0                  0
     NEBRASKA                     1,637             253            15                   0                  0
     NEVADA                       1,530             198            13                   0                  0
     NEW HAMPSHIRE                1,148             159            14                   0                  0
     NEW JERSEY                   7,945           1,189            15                   0                  0
     NEW MEXICO                   1,685             216            13                   0                  0
     NEW YORK                    18,136           2,685            15              41,070                  2
     NORTH CAROLINA               7,195           1,050            15               2,198                  0
     NORTH DAKOTA                   641             105            16                   0                  0
     OHIO                        11,151           1,696            15               8,952                  1
     OKLAHOMA                     3,278             496            15                   0                  0
     MEDICARE ENROLLEE DISTRIBUTION BY STATE AS OF DECEMBER 01, 1996



                                                                                                        HCPP
                                 TOTAL         MEDICARE        MEDICARE           HCPP               ENROLLEES
                               POPULATION        BENES           BENES          ENROLLEES             AS % OF
                               IN THOUS.       IN THOU         PERCENT           DECEMBER             MEDICARE
     STATE                     12/31/95 *      09/01/95        TOTAL POP          1996                  BENES
     ---------------------------------------------------------------------------------------------------------

     OREGON                       3,141             476            15                   0                  0
     PENNSYLVANIA                12,072           2,104            17               1,742                  0
     RHODE ISLAND                   990             171            17                   0                  0
     SOUTH CAROLINA               3,673             520            14                   0                  0
     SOUTH DAKOTA                   729             118            16                   0                  0
     TENNESSEE                    5,256             787            15                   0                  0
     TEXAS                       18,724           2,124            11               6,701                  0
     UTAH                         1,951             191            10              21,588                 11
     VERMONT                        585              85            15                   0                  0
     VIRGINIA                     6,618             835            13                   0                  0
     WASHINGTON                   5,431             701            13                   0                  0
     WEST VIRGINIA                1,828             335            18                   0                  0
     WISCONSIN                    5,123             775            15              10,854                  1
     WYOMING                        480              62            13                   0                  0

     UMW (90091)                262,754          37,428            14              77,364                  0


     TOTAL                      262,754          37,428            14             429,269                  1


     GRAND TOTAL                262,754          37,428            14           4,733,925                 13


     * DATA FROM THE U.S. DEPARTMENT OF COMMERCE

                                                  BENEFIT AND PREMIUM SUMMARY - PLAN COUNTS
                                                             TEFRA RISK HMOS AND CMPS
                                                             (AS OF DECEMBER 01, 1996)

                                                                                                                            EXTEND.
                       ROUTINE             HEALTH    OUTPAT.    FOOT      EYE                 EAR      HEARING              MENTAL
                       PHYSICALS  IMMUM    ED.       DRUGS      CARE      EXAMS    LENSES     EXAMS    AIDS      DENTAL     HEALTH
                       ---------  -----    ------    -------    ----      -----    ------     -----    -------   ------     ------
 NUMBER AND              231      208       58       144        88       214       17        179         9        88       NO DATA
 PERCENT OF PLANS
 OFFERING ADDITIONAL
 BENEFITS IN THESE
 CATEGORIES IN BASIC
 OPTION PACKAGE

                       (97.47%)  (87.76%)  (24.47%)  (60.76%)  (37.13%)  (90.30%)  (7.17%)   (75.53%)  (3.80%)   (37.13%)
 ----------------------------------------------------------------------------------------------------------------------------------

 PLANS CHARGING COPAYS FOR BASIC PACKAGE: 230 YES (97.05%) 7 NO (2.95%)

 PLANS OFFERING HIGH OPTION PACKAGE: 99 OR (41.77%)

 BASIC PREMIUM RANGE:

                                    NUMBER OF PLANS             RANGE            (%)
                                    ---------------             -----             -

                                          153                   $ 0               64.56
                                           11                   $ 0.01 - $19.99    4.64
                                           34                   $20.00 - $39.99   14.35
                                           26                   $40.00 - $59.99   10.97
                                           11                   $60.00 - $79.99    4.64
                                            2                   ABOVE $80.00       0.84

 AVERAGE BASIC PREMIUM = $13.52     HIGHEST BASIC PREMIUM = $106.00     MEDIAN BASIC PREMIUM = $36.00
