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HealthMarkets Enters Medicare Market with HealthMarkets Care Assured Plans

Nancy Cocozza Appointed President of HealthMarkets Medicare Group

North Richland Hills, Texas – September 19, 2007 – HealthMarkets, Inc. (http://www.healthmarkets.com) announced today that it has been approved by the Centers for Medicare and Medicaid Services (CMS) to introduce new Medicare Advantage and Part D products later this year for a January 1, 2008 start date.

“We are excited about expanding into the Medicare market with our HealthMarkets Care Assured plans,” said HealthMarkets President and Chief Executive Officer William J. Gedwed. “The plans fit the needs of the marketplace and they build on our expertise in serving individuals and families for more than 20 years.”

Gedwed appointed Nancy G. Cocozza as president of the Company’s newly formed Medicare Group and as a HealthMarkets executive vice president. Prior to joining HealthMarkets, Cocozza served as senior vice president of Coventry Health Care where she led the company’s government programs from 2001 to 2006. Cocozza previously served in a variety of executive roles at Aetna, Inc. and its predecessor, U.S. HealthCare.

“We are pleased to welcome Nancy to the HealthMarkets team,” Gedwed said. “Nancy’s extensive background in Medicare programs gives her the perfect blend of knowledge and skills to launch these new health plans and help us become a leader in the Medicare market.”

HealthMarkets Care Assured plans (http://www.HMCareAssured.com) are the Company’s first entry into the Medicare market and will be underwritten by The Chesapeake Life Insurance Company, a HealthMarkets company.

“A Medicare Advantage plan must deliver real value along with an effective method for reaching those who are eligible,” Cocozza said. “Our carefully designed plans, combined with a sales force that understands the one-on-one, personalized nature of the individual health insurance market, will deliver outstanding service to Medicare beneficiaries.”

Based on extensive field testing of Medicare beneficiary needs, HealthMarkets Care Assured plans will offer affordable premiums, predictable co-payments, and some important value-added services that include dental, vision and hearing discounts as well as help in the Part D prescription drug coverage gap.

HealthMarkets Care Assured will commence marketing activities on October 1, 2007, for January 1, 2008 effective coverage in selected markets in 29 states.

HealthMarkets is a leading provider of affordable health and life insurance to the self-employed, individuals and small businesses through its subsidiaries, The MEGA Life and Health Insurance Company, Mid-West National Life Insurance Company of Tennessee and The Chesapeake Life Insurance Company.

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About HealthMarkets

HealthMarkets, headquartered in North Richland Hills, Texas, is a provider of health and life insurance products to individuals, families, the self-employed, Medicare beneficiaries and small businesses. HealthMarkets offers products and services through its licensed insurance subsidiaries The MEGA Life and Health Insurance Company, Mid-West National Life Insurance Company of Tennessee and The Chesapeake Life Insurance Company. The Company’s offerings include individual and self-employed health insurance, small employer group health insurance, life insurance and reinsurance. Through its Consumer Guided Health Insurance plans, HealthMarkets seeks to provide affordable and accessible health coverage to individuals and small businesses. The Company is owned by a group of private equity investors, including affiliates of The Blackstone Group, Goldman Sachs Capital Partners and DLJ Merchant Banking Partners, members of management and the Company’s independent, licensed agents through the Company’s agent stock accumulation plans. For more information, visit http://www.healthmarkets.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

Some of the matters discussed in this news release may contain forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate," "believe," "estimate," "expect," "intend," "objective," "plan," "possible," "potential" and similar expressions. Actual results may vary materially from those included in the forward-looking statements. Factors that could cause actual results to differ materially from those included in the forward-looking statements include, but are not limited to, general economic conditions; the continued ability of the Company to compete for customers and insureds in an industry where many of its competitors may have greater market share and/or greater financial resources; the Company’s ability to accurately estimate medical claims and control costs; changes in government regulation that could increase the costs of compliance or cause the Company to discontinue marketing its products in certain states; the Company’s failure to comply with new or existing government regulations that could subject it to significant fines and penalties and/or result in restrictions on its operations; changes in the relationship between the Company and the membership associations that make available to their members the health insurance and other insurance products issued by the Company’s insurance subsidiaries; changes in the laws and regulations governing so-called “association group” insurance (particularly changes that would subject the issuance of policies to prior premium rate approval and/or require the issuance of policies on a “guaranteed issue” basis); significant liabilities and costs associated with litigation; failure of the Company’s information systems to provide timely and accurate information; negative publicity regarding the Company’s business practices and/or regarding the health insurance industry in general; the Company’s inability to enter into or maintain satisfactory relationships with networks of hospitals, physicians, dentists, pharmacies and other health care providers; failure of the Company’s regulated insurance company subsidiaries to maintain their current ratings by A.M. Best Company, Fitch and/or Standard & Poor’s; and the other risk factors set forth in the reports filed by the Company from time to time with the Securities and Exchange Commission.

Media Contacts:

Donna Ledbetter
HealthMarkets Corporate Communications
(817) 255-5405
Donna.Ledbetter@healthmarkets.com
www.HealthMarkets.com

Karen Mellen
For HealthMarkets
(312) 596-3487
Karen.Mellen@bm.com