News Release

(Bothell, WA) Molina Healthcare of Washington, Inc. announced today that it reached an agreement with Aetna U.S. Healthcare of Washington, Inc. to acquire Aetna's Healthy Options and Basic Health Plan contracts. This move will add about 13,000 Healthy Options and Basic Health Plan members to Molina, which is the state's largest Medicaid health plan in terms of enrollment.

Meanwhile, Aetna is winding down its Seattle-area Medicaid HMO operations.

"As Aetna refocuses its business operations, we have determined that we can be more competitive in the Seattle market by focusing our resources on our core commercial health care business,” said Norman Seabrooks, Director of Business Development for Aetna's Washington operations. “Molina Healthcare specializes in Medicaid business, and has the experience and infrastructure to continue to provide our Seattle-area Medicaid members with access to quality care and service. We will work closely with Molina to make the transition as smooth as possible.”

Aetna will continue to offer a full spectrum of commercial products in Washington, including HMO, PPO, Managed Choice, Elect Choice, Dental, Pharmacy and Group products.

Molina Healthcare of Washington, which serves Healthy Options and SCHIP (State Children's Health Insurance Plan) patients in 29 Washington counties and participates with the Basic Health Plan in Spokane and Lincoln Counties, is an affiliate of Molina Healthcare, Inc. With an enrollment of over 420,000 members in four states, Molina Healthcare is among the top 15 national managed care firms, according to InterStudy, a national managed care research organization based in St. Paul, Minnesota. Molina has health plans in California, Washington, Utah and Michigan.

Molina Healthcare's success stems from its focus on the Medicaid and low-income population, as well as a commitment to case management, member outreach and low-literacy programs.

The transition of Aetna's Healthy Options and Basic Health Plan members to Molina Healthcare of Washington is expected to occur by early summer.

“This represents an opportunity for Molina Healthcare of Washington to increase our service areas for Basic Health and to serve a larger number of Healthy Options members,” says Ann Koontz, President of Molina Healthcare of Washington.

With offices located in both eastern and western Washington, Molina Healthcare of Washington has one of the largest networks of physicians, hospitals and ancillary healthcare professionals in Washington serving Healthy Options and SCHIP patients. “Molina Healthcare of Washington believes that a strong partnership and communication with its practitioners are essential for quality patient care,” says Koontz. “Exemplary customer service to members and providers is another key to Molina's success in Washington.”

FACTS ABOUT MOLINA HEALTHCARE OF WASHINGTON

Molina is among the most experienced managed healthcare companies in the state of Washington serving Healthy Options and Basic Health Plan members. Molina emphasizes individualized care that places the physician in the pivotal role of managing healthcare.

Molina is committed to working with community and national organizations to improve health outcomes and promote prevention programs for its members.

FACTS ABOUT MOLINA HEALTHCARE, INC.

Molina Healthcare, Inc. is among the nation's 100 fastest-growing companies that conduct business in inner cities, according to Inc. Magazine and the Initiative for a Competitive Inner City.

Over 20 years ago, the late Dr. C. David Molina founded the company to address the special needs of Medicaid patients. Today, Molina Healthcare continues to carry out his mission. Information about Molina Healthcare is available at www.molinahealthcare.com.

FACTS ABOUT AETNA:

Aetna is one of the nation's leading providers of health care and related group benefits, serving 15.6 million health care members, 12.4 million dental members and 11.5 million group insurance customers, as of January 1, 2002. Information about Aetna is available at www.aetna.com.