Blue Assurance Medicare Supplement Rate Quote and Benefit Summary

Blue Assurance Medicare Supplement Rate Quote and Benefit Summary This brochure is not a policy. Full information about the terms, exclusions and limitations of the policies advertised is found in the Important Information brochure, form # PVA1386 that accompanies the Outline of Coverage included with this brochure. If there is any difference between this material and the policy, the provisions of the policy shall control. This brochure refers to plan form #s AVA1094, AVA1097, AVA1099, AVA1100, application form #s PVA1387-PVA1390. Coverage is not available to Virginians residing in the city of Fairfax, the town of Vienna, or the area east of State Route 123. Anthem Blue Cross and Blue Shield is the trade name of Anthem Health Plans of Virginia, Inc. An independent licensee of the Blue Cross and Blue Shield Association. Registered marks Blue Cross and Blue Shield Association. anthem.com PVA1454-PDF Page 1 of 5

Plans with ScriptSave Discounts See page 4 for more details. Our Recommended Plan Plan A Plan F Age at Enrollment Area M1 Area M2 Area M1 Area M2 65 $66 $59 $89 $80 In 2005, Medicare Does NOT Pay: Part A Hospital Services $912 initial hospital deductible each benefit period $228 a day for days 61-90 in a hospital within the same benefit period rates for other ages shown on page 5 These rates are valid through June 30, 2005. Plan A Plan F $456 a day for days 91-150 (your lifetime reserve days). Please see below for the definition of Lifetime Reserve. 100% of Medicare-allowable expenses for additional 365 days after Medicare hospital benefits stop completely. Calendar-year blood deductible (first 3 pints of blood) if the deductible is not met by the replacement of blood. $114 per day for days 21-100 in a Skilled Nursing Facility Part B Physician and Medical Services $110 Part B deductible 20% of Medicare-approved amount, or for hospital outpatient services, applicable copayments, after $110 Part B deductible is met. 100% of Medicare Part B excess charges. Excess charges are charges you are responsible for paying that are above Medicare s approved amount. Additional Benefits Not Covered By Medicare At-home recovery benefits. Covers up to $40 a visit for home care certified by a physician as necessary, or for personal care where Medicare has approved a home treatment plan for recovery from an injury or sickness. You must receive treatment within 8 weeks of your last Medicare visit, limited to 7 visits per week, up to $1,600 annually. Benefits for medically necessary emergency care received in a foreign country. Covers 80% of charges, after a $250 calendar-year deductible, up to a $50,000 lifetime maximum. (See the Outline of Coverage for details.) Outpatient prescription drug benefits. Covers 50% of charges, after a $250 calendar-year deductible up to $1,250 per calendar year with Plans H and I, and up to $3,000 per calendar year with Plan J. Preventive care services including an annual clinical examination and preventive tests, up to $120 per calendar year. Please Note: Depending on your age, your length of time in Medicare Part B at enrollment, the supplemental plan you choose, and your area of residence, you may have to qualify medically for this coverage. If you do not qualify medically or need Medicare Supplement coverage prior to age 65, you are eligible for one of our standard Guaranteed Issue policies shown in your Outline of Coverage. PVA1254-PDF Page 2 of 5

Plans with Prescription Drug Benefits See page 4 for more details. Our Recommended Plan Plan I Plan J Age at Enrollment Area M1 Area M2 Area M1 Area M2 In 2005, Medicare Does NOT Pay: Part A Hospital Services $912 initial hospital deductible each benefit period $228 a day for days 61-90 in a hospital within the same benefit period $456 a day for days 91-150 (your lifetime reserve days). Please see below for the definition of Lifetime Reserve. 100% of Medicare-allowable expenses for additional 365 days after Medicare hospital benefits stop completely. Calendar-year blood deductible (first 3 pints of blood) if the deductible is not met by the replacement of blood. $114 per day for days 21-100 in a Skilled Nursing Facility Part B Physician and Medical Services $110 Part B deductible 20% of Medicare-approved amount, or for hospital outpatient services, applicable copayments, after $110 Part B deductible is met. 100% of Medicare Part B excess charges. Excess charges are charges you are responsible for paying that are above Medicare s approved amount. Additional Benefits Not Covered By Medicare At-home recovery benefits. Covers up to $40 a visit for home care certified by a physician as necessary, or for personal care where Medicare has approved a home treatment plan for recovery from an injury or sickness. You must receive treatment within 8 weeks of your last Medicare visit, limited to 7 visits per week, up to $1,600 annually. Benefits for medically necessary emergency care received in a foreign country. Covers 80% of charges, after a $250 calendar-year deductible, up to a $50,000 lifetime maximum. (See the Outline of Coverage for details.) 65 $143 $129 $198 $178 rates for other ages shown on page 5 These rates are valid through June 30, 2005. Plan I Plan J Outpatient prescription drug benefits. Covers 50% of charges, after a $250 calendar-year deductible up to $1,250 per calendar year with Plans H and I, and up to $3,000 per calendar year with Plan J. Preventive care services including an annual clinical examination and preventive tests, up to $120 per calendar year. Please Note: Depending on your age, your length of time in Medicare Part B at enrollment, the supplemental plan you choose, and your area of residence, you may have to qualify medically for this coverage. If you do not qualify medically or need Medicare Supplement coverage prior to age 65, you are eligible for one of our standard Guaranteed Issue policies shown in your Outline of Coverage. PVA1454-PDF Page 3 of 5

Important Information Here s some important Medicare Supplement definitions. Benefit Period Generally this time period begins the day the insured person is hospitalized and ends after the insured person has been out of the hospital, skilled nursing facility or rehabilitation facility for 60 days in a row. If you go back to the hospital after 60 days, a new benefit period begins. Coinsurance The dollar amount you are responsible for paying, usually a percentage of the Medicare-approved amount. Copayment A flat, fixed dollar amount for a medical service or supply you are responsible for paying for. Deductible The dollar amount that you must pay for covered services before Medicare or your health insurance carrier begins payment. Effective Date The date your coverage begins. Lifetime Reserve For hospital care, Medicare gives you 60 reserve days for you to use in your lifetime. After you have been in the hospital for 90 days in one benefit period, you can use your reserve days and Medicare will pay all covered costs except for the $456 per day Medicare Part A expense. Medicare Assignment Doctors who accept Medicare assignment agree to accept Medicare s approved amount as the total charge for a service or supply. Always ask your doctors and medical suppliers whether they accept assignment of Medicare claims. If they do, this could mean savings for you. The ScriptSave Prescription Discount Card* Anthem provides a ScriptSave prescription discount card to people who purchase our Medicare Supplement plans without drug coverage (Plans A and F). While it s not a prescription drug benefit, this discount feature can help give our customers a break on the cost of prescriptions, depending on the drug and the pharmacy they visit. With your ScriptSave card, you receive the lower of two costs: ScriptSave s negotiated price or the retail price, including any applicable senior discounts. Since we began the program in November 1998, it has saved our customers over $25.3 million an average of 22% off the retail cost of their prescriptions.** Like our other Healthy Values SM discount programs, there are no claims to file when you use your ScriptSave card. You simply show your ScriptSave card to the network pharmacist, receive your discount and pay the pharmacy directly. The ScriptSave discount program is available at participating pharmacies such as Giant Food Stores, Ukrops, Winn Dixie, Kroger, Kmart, Rite Aid, Target and many more. Plans with Prescription Drug Benefits Plans I and J offer prescription drug benefits. Both plans have a $250 calendar-year deductible. Once that deductible is met, Plan I will cover 50% of your outpatient prescription drug charges up to $1,250 per calendar year and Plan J covers 50% up to $3,000 per calendar year. And even if you meet the maximum amount that your Anthem prescription drug benefit covers, you are still eligible to receive a discount from participating pharmacies. How? Simply by presenting your Medicare Supplement ID card whenever you visit a participating pharmacy. Your Anthem drug benefits keep working for you because the price you pay at the time of purchase still reflects our special negotiated prices with the pharmacy. It s easy to apply. 1. Complete your application. Be sure you ve filled in all the requested information. 2. Make sure you ve signed and dated the application in the Certification and Authorization section. 3. If you ve made any changes while completing the application, be sure to initial each of those changes. Anthem offers bank draft as a convenient payment option. Bank draft saves you time, effort, and the cost of postage. It may also give you peace of mind so if you travel, or if other emergencies arise, the last thing you ll need to worry about is your health insurance. Simply check the bank draft option in the Coverage and Billing Section and complete the Automatic Bank Draft Authorization form. * This discount program is not an insurance policy and does not provide insurance coverage. It is not guaranteed by your policy and can be modified or discontinued at our discretion. Discounts are available exclusively through participating pharmacies. ** ScriptSave Medical Security Card report August 2004. PVA1454-PDF Page 4 of 5

Anthem Blue Cross and Blue Shield can only raise your premium if we raise the premium for all plans like yours in Virginia. Premiums automatically increase as you get older. You can expect your premiums to increase each year due to changes in age. Currently the monthly premiums for all ages under these certificates are as follows: Area M1 Plan A Plan F Plan I Plan J 65 $66 $89 $143 $198 66 $70 $97 $153 $204 67 $73 $104 $160 $210 68 $76 $109 $167 $217 69 $79 $114 $172 $221 70 $82 $118 $177 $227 71 $85 $123 $181 $231 72 $88 $128 $185 $235 73 $90 $132 $187 $239 74 $92 $137 $189 $242 75 $96 $147 $192 $254 Area M2 Plan A Plan F Plan I Plan J 65 $59 $80 $129 $178 66 $63 $88 $138 $184 67 $66 $93 $144 $190 68 $69 $98 $150 $195 69 $71 $102 $155 $199 70 $74 $106 $160 $204 71 $77 $111 $163 $208 72 $79 $115 $167 $212 73 $81 $119 $169 $215 74 $83 $123 $170 $218 75 $86 $133 $173 $229 The premiums for other Medicare Supplement plans that are issue age or community rated do not increase due to your age. While the cost of these plans at the covered individual s present age may be lower than the cost of a Medicare Supplement plan that is based on issue age or community rated at your present age, it is important to compare the potential cost of these plans over the life of the plan. PVA1454-PDF Page 5 of 5

YOUR OUTLINE OF COVERAGE IS ENCLOSED. Important Coverage Information Please Read Carefully What you should know before you buy Many people are concerned about what a Medicare Supplement plan may or may not cover. Our Outline of Coverage is enclosed and shows the benefits and rates for each attained age plan offered by Anthem. We have provided this brochure so you can review the important terms, exclusions and limitations of our policies all in one place, in terms that are easy to understand. Please refer to your rate quote for the premium information relevant to you. The policyholder for the Anthem Blue Cross and Blue Shield plans described in this outline is the Trustee for the Anthem Health Plans Group Trust. Insureds, called certificateholders, receive certificates of coverage. Certificates describe important plan information, including benefits, exclusions, limitations, and payment responsibilities. What are Terms? When we say terms, we mean the important legal information that applies to our coverage information you need to know as our customer. In this section, you ll find details about waiting periods for pre-existing conditions, eligibility for coverage, Medicaid entitlement, premium changes, coverage termination, service area guidelines, and coverage renewability. What are Exclusions and Limitations? When you buy health insurance coverage, you join a group of people who have bought the same plan. As a member of that group, you contribute to a pool of funds that is used to help cover medical expenses. To make sure the funds are used fairly throughout the group, health care companies have a set of specific rules that apply equally to all members. These rules are often called exclusions and limitations. Exclusions are services not covered by the coverage you select. When we say services we mean both medical services and supplies. Limitations are preset limits (or capped benefits) on time periods, dollar amounts or number of visits we will cover for a particular service. These limits are shown on the benefits chart in your sales brochure. With Federally standardized Medicare Supplement coverage, the plan benefits are the same, from company to company. Likewise all plans have exclusions and limitations. This means that with any Medicare Supplement carrier you consider, you should find the same basic set of exclusions and limitations described along with their benefits. If you do not find that information, be sure to ask that carrier for more details. We want you to find the right Medicare Supplement plan, so please don t hesitate to call your Anthem Representative with any questions. PVA1386 1 of 6

Important legal terms The following section gives you legal information that applies to this coverage. Please be sure to read this section, and if you have any questions, call your Anthem Representative. Pre-existing Conditions A pre-existing condition is any medical condition you had in the 6 months before the date you are officially covered by your new plan (your effective date ). If you received medical advice, or care for a condition during that time, it is a pre-existing condition. If medical treatment was recommended for a condition you had during that time, it is a pre-existing condition. Anthem Medicare Supplement plans may have a six month waiting period before pre-existing conditions are covered. If you have previously been determined to be free from breast cancer based on negative follow-up care for a period of five years or more, the pre-existing condition limitation shall not apply to routine follow-up care for breast care rendered during the 6 months immediately preceding or following your effective date. You can have your waiting period for pre-existing conditions waived if... Your certificate s effective date is within six months after your 65th birthday; You were insured by any other Blue Cross and/or Blue Shield policy immediately before your new certificate s effective date; You were insured by any type of Medicare Supplement policy immediately before your new certificate s effective date; You are 65 or older, qualify for Medicare due to age and are within six months of your Medicare Part B coverage effective date; or You meet certain eligibility requirements when coming from a Medicare+Choice, Medicare Select, Medicare Supplement, employer group health plan or Program of All Inclusive Care for the Elderly (PACE) provider for 65+ individuals. If you have any questions, please call your Anthem Representative. IMPORTANT: Please note that your certificate s effective date will be 12:01 a.m. Eastern Standard Time on the date designated by Anthem in accordance with company procedures in place at the time of application. Eligibility To be eligible for Anthem Medicare Supplement coverage, you must meet the following criteria: You must be eligible for Medicare Part A or Medicare Part B. (It s usually in your best interest to have both Parts A and B. Having both means you spend less of your own money for covered doctor and hospital services.); You must be a resident of the Anthem service area at the time your certificate becomes effective; and If you have another Medicare Supplement policy, you must replace it with your Anthem plan. If you become entitled to Medicaid Medicaid is not the same program as Medicare. People become eligible for the Medicaid program based on income. If you become entitled to Medicaid benefits, you may suspend your Anthem supplemental coverage and premiums for up to 24 months. You must send us a written request to temporarily stop your coverage within 90 days after the date of your Medicaid entitlement. Premium Changes With Anthem Medicare Supplement plans, you are never singled out for a premium increase due to changes in your health status. Your original premium is determined by many factors including the plan you choose, where you reside and your age when your coverage officially begins (your coverage effective date). These factors make up your rating category. When Anthem changes premiums, they change for all people in your rating category. You will be notified at least 30 days before the effective date of any premium change to your current plan. With Anthem s Attained Age plans, A, F, I and J, your premium could change for any of the following reasons: annual changes in Medicare deductibles and coinsurance; new state or Federal regulations; rising health care costs; change in your age; change in your residence; or change in billing cycle Termination Provisions You may end this coverage by providing written or verbal notice to us. Coverage will terminate on the date upon receipt of your request or on a later date provided in your request. We will terminate your coverage if any premium, after the first one, is not paid by the end of the grace period. We are not required to give you notice of cancellation. We may end your coverage if you misrepresented or omitted important information on your application, made fraudulent misstatements on your application, or cease to be eligible for Part A and Part B of Medicare. 2 of 6

We will refund any premiums paid for coverage minus any claims paid for services incurred after the termination date. This certificate does not cover any service or supply provided on or after the date the plan s coverage ends. Leaving our Service Area Our service area is Virginia, excluding the city of Fairfax, the town of Vienna, and the area east of State Route 123. If, after the certificate effective date, you move out of our service area, you can keep your coverage and your certificate will remain in effect with no changes to certificate provisions or benefits. Renewability Your coverage under the group trust policy as described in the certificate is guaranteed renewable for your lifetime. We may not terminate it for any reason other than the nonpayment of premiums, or fraudulent or material misrepresentation. Anthem shall not cancel or non-renew solely for health status of the certificateholder. If the trustee of the group trust policy terminates the policy, Anthem shall offer certificateholders an individual Medicare Supplement policy which (at the option of the certificateholder): Provides for continuation of the benefits contained in the group trust policy, or Provides for such benefits as otherwise meets the requirements of this provision. Certificate Language: Our Standard Medicare Supplement plans do not cover the following: Services you receive before the Effective Date Services you receive related to an inpatient admission which began before the Effective Date Losses you incur within the first six months after the Effective Date if related to a pre-existing condition (unless Your Certificate provides differently) Explanation: These plans do not cover medical services or supplies that you receive before the date your coverage officially begins (your plan effective date). This includes any services or supplies you receive related to a hospital admission that began before the date your coverage begins. These plans have a six month waiting period before pre-existing conditions are covered. A pre-existing condition is any medical condition you had in the 6 months before you are officially covered by your new plan (your effective date ). If you received medical advice, or care for a condition during that time, it is a pre-existing condition. If medical treatment was recommended for a condition you had during that time, it is a pre-existing condition. You may not have a waiting period for pre-existing conditions. Be sure to read the Pre-existing Conditions section on page 2 for more information. The following exclusions all relate to how our supplemental plans work together with Medicare. Because Anthem Medicare Supplement plans are designed to supplement Medicare, our payments for covered services are based on what Medicare pays or does not pay. And, like all Medicare Supplement plans nationwide, our plans are standardized by the Federal Government, which means that each plan has been designed and approved by the Centers for Medicare and Medicaid Services. Services that are payable under Medicare These plans do not pay supplemental benefits for services that Medicare already covers in full. 3 of 6

Certificate Language: Services that are not Medicare eligible expenses, except as stated in the Certificate Services that are not reasonable by Medicare standards for diagnosis and treatment of certain conditions Services in excess of Medicare s allowance for mental illness-related services Free services, including services in which no charge would have been made if there were no insurance Services provided by relatives or by a household member Services from Federal providers and Federal agencies Services paid (directly or indirectly) by a government entity Services covered by workers compensation or similar law, or employer group health plan required by law to pay benefits before Medicare pays benefits Explanation: These plans do not cover services that Medicare does not cover, unless your certificate states otherwise. For example, Plans I and J provide prescription drug benefits that Medicare does not offer. We follow Medicare s guidelines when we review claims for coverage. If Medicare does not approve the diagnosis or treatment given for a particular condition, we also do not cover the service. These plans do not provide benefits beyond the amount Medicare would cover for services to treat mental illness. These plans do not provide any benefits for services that are normally free, or would not cost anything if you did not have any insurance. For example, these plans do not pay for free public screening services like glaucoma or diabetes testing. These plans do not cover services that you receive from family or household members. For example, if you have a family member who administers medication to you, the plan will not pay benefits for that service. These plans do not cover services provided by doctors, hospitals or agencies sponsored by the Federal government, such as Tricare/CHAMPUS. They also do not cover services that federal or state governments already cover. These plans do not cover services that are already covered by worker s compensation benefits. In addition, if you are eligible for employer benefits that cover your medical care before Medicare begins to pay, these plans do not duplicate payments made by your employer plan. Services required because of war or act of war Cosmetic surgery, except as required for repair of an accidental injury or to improve the function of a malformed body part Dental services, including services for the supportive structure of teeth Certain foot care services, including flat foot condition treatment, orthopedic shoes, and other supportive devices for feet Personal comfort items Custodial care Eyeglasses, vision care, hearing aids 4 of 6

Certificate Language: Services deemed by Anthem, in its sole discretion, to be not Medically Necessary when Anthem is primary payor Services deemed by Anthem, in its sole discretion, to be Experimental/Investigative when Anthem is primary payor Explanation: For most medical services you ll receive, Medicare will be primary payor and we will be secondary payor. Our Medicare Supplement payment will be based on Medicare s allowed amount. If Medicare does not approve a certain procedure, we abide by their guidelines and do not pay Medicare Supplement benefits. However, some plans, such as Plan J, provide benefits for services Medicare does not cover. In these cases, Anthem is considered the primary payor. When we are primary payor, we review claims to determine whether a service is medically necessary. This ensures that we can provide complete, cost-effective health insurance for all our customers. Our licensed medical staff uses corporate medical policy guidelines based on accepted medical practice for safe and effective treatment. They also follow specific steps in making decisions about whether services are medically necessary. The same guidelines and procedures are applied to everyone when making these decisions. As with determining medical necessity, when we are primary payor for a service, we review the service to determine whether it is experimental or investigative. The Blue Cross and Blue Shield Association has a committee of medical professionals dedicated to reviewing new medical treatments for safety and effectiveness. This committee examines the current scientific medical literature on new treatments and recommends coverage for those that are shown to be safe and effective. They do not recommend new treatments that are still experimental and under investigation. Our medical staff follows the committee s recommendations and careful guidelines in determining whether a new treatment is safe and effective and can be covered by the plan. The following exclusions also apply to your Certificate, unless you have the Certificate noted: Services from a Skilled Nursing Facility, unless you have Plan F, I or J Services You received outside the United States, unless you have Plan F, I or J Outpatient prescription drugs, unless you have Plan I or J Routine physical exams and immunizations, unless you have Plan J Services related to hearing care, unless you have Plan J 5 of 6

Important Notice! If you ve had coverage in the past 63 days that supplemented your Medicare benefits, you may have special rights when it comes to getting new Medicare Supplement coverage. You may have special rights if: Your employer group health plan ended and no longer provides you benefits. Your Medicare+Choice plan (for example, a Medicare HMO) terminated or the insurance provider misrepresented the policy to you. Your Medicare Supplement, Medicare Select plan or PACE provider plan terminated or the insurance provider declared bankruptcy or misrepresented the plan to you. You cancelled coverage in a Medicare+Choice or Medicare Select plan within the first 12 months of enrolling. If ANY of the above apply to you, talk to your Anthem Sales Representative to learn more about your special rights and eligibility for Medicare Supplement coverage. This brochure is not an insurance plan, policy or certificate of coverage. If there is any difference between this brochure and the policy, the provisions of the policy shall control. This brochure refers to Anthem Blue Cross and Blue Shield Medicare Supplement plans, form #s AVA1094, AVA1097, AVA1099 and AVA1100. Coverage is not available to Virginians residing in the city of Fairfax, the town of Vienna or the area east of State Route 123. Anthem Blue Cross and Blue Shield is the trade name of Anthem Health Plans of Virginia, Inc. An independent licensee of the Blue Cross and Blue Shield Association. 6 of 6