Universal American Financial Corp. Acquires Assets of Living Strategies Inc.; Significantly Enlarges Universal's Elder Care Administrative Services Arm

RYE BROOK, N.Y., Nov 26, 2001 (BUSINESS WIRE) -- Universal American Financial Corp. (NASDAQ National Market: UHCO ) ("Universal American") today announced that its wholly-owned subsidiary, CHCS Services, Inc., ("CHCS") a leading administrator of senior insurance and non-insurance products, has acquired assets, including certain contracts, trademarks and proprietary web-based technology, of Living Strategies Inc., a privately held company based in Bala Cynwyd, Pennsylvania.

Living Strategies is a recognized provider of employer-sponsored elder care programs, providing assistance and support to those dealing with the aging of their parents and family members. CHCS will retain the services of key management members of Living Strategies. Terms of the all-cash transaction were not disclosed.

Since the early 1990's, CHCS has provided administrative support for the long term care divisions of several large insurance companies. CHCS performs policy administrative services as well as underwriting assessments, benefit determinations and information and referral through its proprietary nationwide network of trained elder care specialists, including 50 on-site care managers operating from a 24/7 customer contact center and 3,500 nurses, in addition to its national network of 5,500 long term care providers.

As a result of the acquisition of the Living Strategies assets, CHCS will enhance its technology infrastructure and expand the audience for its elder care management services. CHCS will combine Living Strategies' proprietary online platform for professional elder care assessment and reporting with its current infrastructure to establish a national, scaleable system for offering CHCS's services to insurance companies, as well as corporations, associations and organizations seeking elder care services for their employees and members. These services, accessible through the customer contact center and the web, will permit family members living thousands of miles away from a senior parent to assess the needs of their parent, create a plan of action and identify the best and most cost efficient resources for long term care, such as nursing homes, assisted living facilities and home health agencies.

Gary Jacobs, President of CHCS commented, "Only 6% of eligible seniors have long term care insurance. We have embarked on a strategy to offer elder care services to the other 94%. Corporations are increasingly making elder care support services available to their employees, as workers affected by aging elders cost employers $29 billion per year. One study points to elder care-related expenses costing employers an average of $3,142 per year per employee, in terms of absenteeism and lost productivity. Just as human resource managers pressed their companies to offer child care benefits to encourage employee retention and productivity, these professionals have come to recognize similar value in elder care benefits."

Christopher Gatti, former President and CEO of Living Strategies who will now help lead CHCS's efforts in the elder care services market, commented, "I am delighted to be joining the Universal American family of companies and CHCS to develop a comprehensive solution for the millions of families facing the challenges of elder care."

In addition to the Living Strategies proprietary technology, the acquisition includes several key business relationships. Living Strategies marketed its services directly to major corporations and through work/life programs, employee assistance programs (EAP's) and corporate benefit brokers. Using the Living Strategies platforms, CHCS has begun to provide elder care services to the employees of two Fortune 100 companies, which contracts have been assigned to CHCS.

As a further consequence of acquiring the Living Strategies assets, CHCS will become a marketing partner of Bright Horizons Family Solutions, a leading provider of employer-sponsored child care, early education and work/life solutions. According to David Lissy, Executive Vice President and Chief Development Officer for Bright Horizons, "For several years our clients have expressed interest in elder care solutions that help their employees whose families are faced with challenging situations around caring for an elder. Living Strategies has provided a much needed service on a national basis so employers can help provide quality information and direct caregiving support and case management. Our new relationship with CHCS will allow for this service to grow stronger and insure its viability over the long term."

Richard Barasch, Universal American's Chairman and CEO stated, "CHCS Services, Inc., Universal American's administrative services division, is growing rapidly. The acquisition of the Living Strategies assets complements the Company's administrative business, in that it broadens the segment, expands our customer base and allows us to further penetrate the swiftly emerging elder care market."

    About Universal American Financial Corp. and CHCS Services, Inc.

CONTACT:          Universal American Financial Corp., Rye Brook 
                  Robert A. Waegelein, 914/934-8820
                  or
                  INVESTOR RELATIONS COUNSEL:
                  The Equity Group Inc.
                  www.theequitygroup.com
                  Stephanie K. Horton, 212/836-9611
                  Linda Latman, 212/836-9609