Sierra Health Services, Sierra Health Services, Inc.Inc.A Managed Care CompanyA Managed Care Company

Updated 11/6/07

Cautionary StatementCautionary StatementStatements in this presentation and verbal statements made by representatives of Sierra that are not historical facts are forward-looking and based on management’s projections, assumptions and estimates; actual results may vary materially. Forward-looking statements are subject to certain risks and uncertainties, which include but are not limited to: 1) potential adverse changes in government regulations, contracts and programs, including the Medicare Advantage program, the Medicare Prescription Drug Plan and any potential reconciliation issues, Medicaid and legislative proposals to eliminate or reduce ERISA pre-emption of state laws that would increase potential managed care litigation exposure; 2) competitive forces that may affect pricing, enrollment, renewals and benefit levels; 3) unpredictable medical costs, malpractice exposure, reinsurance costs, changes in provider contracts and inflation; 4) impact of economic conditions; 5) changes in healthcare reserves;6) the effects of the termination of the HCA contract; 7) the amount of actual proceeds to be realized from the note receivable related to the sale of the workers' compensation insurance operation; and 8) receipt of certain regulatory approvals and the satisfaction or waiver of other conditions pertaining to the proposed merger with UnitedHealth Group. Further factors concerning financial risks and results may be found in documents filed with the Securities and Exchange Commission and which are incorporated herein by reference. Consequently, all of the forward-looking statements made in this presentation or verbally by representatives of Sierra are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Sierra will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Sierra or its business or operations. Sierra assumes no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.

Disclosure StatementDisclosure Statement

This presentation includes the following non-Generally Accepted Accounting Principle (GAAP) measures:

Medical care ratio excluding PDP Pretax margin excluding Enhanced PDP

Under SEC Regulation G we are required to reconcile these measures with GAAP.

Merger AnnouncementMerger Announcement Sierra signed a definitive agreement to be

acquired by UnitedHealth Group on 3/11/07 $43.50 per share in cash Total equity value of $2.6 billion Received stockholder approval on June 27,

2007 Received all required state approvals Have substantially complied with DOJ

second request Expect to close by year end 2007

Private Insurance (includes

HMO, PPO, and self-insured)

55%

Medicare14%

Uninsured 17%

Military 6%

Medicaid8%

Nevada Health Insurance Nevada Health Insurance Demographics Demographics (1)(1)

(1) U.S. Census Bureau (2005) -Total Nevada Population = 2,448,000

227 252 282 312 319

5153

5659 59

3951

5560 58

0

50

100

150

200

250

300

350

400

450

500

12/ 31/ 03 12/ 31/ 04 12/ 31/ 05 12/ 31/ 06 9/ 30/ 07

Commercial Medicare Advantage Medicaid

Membership Membership

(in thousands)

317356

393431

8.9% CAGR436

Commercial Sales GrowthCommercial Sales Growth

Commercial Members : 319,200Commercial Members : 319,200 Includes the loss of 11,000 lives on Includes the loss of 11,000 lives on

1/1/07 from three large groups1/1/07 from three large groups Expect 4% Net Commercial Growth Expect 4% Net Commercial Growth

in 2007in 2007 Commercial rate increase of Commercial rate increase of

approximately 4% before buydownsapproximately 4% before buydowns

September 30, 2007

501+ (large)63%

51-500 (mid-size)30%

1-50 (small)7%

Health Plan of NevadaHealth Plan of NevadaMembership Membership CharacteristicsCharacteristics(1)(1)

All Others41%

School Districts

8%

Gaming19%

Government11%

Unions13%

National Accounts

8%

Commercial Employer Group Size Commercial Employer Type Mix

(1) Based on number of subscribers in each category

September 30, 2007

Medicare Sales Growth*Medicare Sales Growth*

September 30, 2007

Medicare Advantage Members: 59,200

Expect 1% Net Medicare Growth for 2007

Minimal yield increase for 2007

*Includes Fully Insured Only

Prescription Drug Plan – Part DPrescription Drug Plan – Part DSeptember 30, 2007

Basic Plan members: 152,400 Stand-alone PDP 2007

30 states and the District of Columbia

Auto-enrollment provider in AZ, CA(1), CO, ID, NV(1), OR, UT, WA

Limited marketing effort Expect pre-tax income of approximately $25

million(2)

In 2008, auto-enrollment provider only in Arizona1) Will not receive new auto-enrollees for 2007

2) Earnings from basic plan only

Prescription Drug Plan – Part DPrescription Drug Plan – Part DSeptember 30, 2007

Enhanced Benefits Plan: 45,500 members 30 states and the District of Columbia Plan includes generic and brand prescription coverage

in the “donut hole” We now estimate $58.9 million loss for full year 2007 Premium deficiency reserve of $22.1 million at

September 30, 2007 Change in estimate of $3.6 million in Q3 was due to

higher than projected utilization during the third quarter of 2007 and lower than projected risk share from CMS, which was partially offset by a decrease in expenses due to better than expected collections of the members’ portion of the premiums.

We did not submit a bid and will not offer this product in 2008

MedicaidMedicaidSeptember 30, 2007Medicaid Members: 57,500

Mandatory 2 Plan Market in Nevada Currently Serving CHiPS, TANF, CHAP 53% Medicaid HMO Market Share in Nevada (1)

Expect Medicaid membership to be slightly down in 2007

Received 1% rate increase effective 1/1/07; New contract effective 11/1/06 through

6/30/09 with DHCFP option to extend the contract for an additional two years

(1) Nevada State Health Division, HMO Industry Profile 6/30/07

Nevada Nevada Medicaid Market Share (HMO)Medicaid Market Share (HMO)(1)(1)

Q2-05 Q2-06 Q2-07 Q2-05 Q2-06 Q2-07

Health Plan of Nevada 48.1% 52.4% 53.3% 46.7% 51.4% 50.2%

Anthem HMO Nevada 46.7% 49.8%

Nevada Care 51.9% 47.6% 53.3% 48.6%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Market Penetration 46.7% 48.0% 46.5% 55.4% 57.0% 57.1%

Statewide Clark County

(1) Nevada State Health Division, HMO Industry Profile June 30, 2005, 2006 and 2007

Medical SubsidiariesMedical Subsidiaries

Clinical OverviewClinical Overview

Medical Subsidiaries

Family Healthcare Services

(FHS)

Family HomeHospice(FHH)

Total HomeCare of Nevada

(THC)

BehavioralHealthcare Options

(BHO)

Southwest Medical Associates

(SMA)

• Multi-specialty physician group

• 250 Providers

• Provides care services in patient’s home

• Medicare certified home health agency

• Hospice servicing terminally ill patients

• Medicare certified

• Home care products, infusion therapy services, and specialty drugs

• DME

• Specialized mental health/substance abuse services

• URAC accredited

Southwest Medical AssociatesSouthwest Medical AssociatesKey Benefits of SMA Operated as true “profit center”Operated as true “profit center”

Lower overall cost structureLower overall cost structure

Quality of careQuality of care

Better risk managementBetter risk management

Technology emphasisTechnology emphasis

Higher formulary complianceHigher formulary compliance

Network stabilityNetwork stability

Southwest Medical Southwest Medical Associates Associates (1)(1)

SMA External NetworkPercentage ofPhysicians 10% 90%

Percentage of Members AccessingPrimary Care 80% 20%

Percentage ofPrimary Care Capitated 100% 40%

Percentage of Specialty Care Capitated 100% 25%

(1) Southern Nevada only. Excludes Medicaid.

Hospital UpdateHospital Update Extended two of three largest hospital

provider contracts, one through the middle of 2008 and the other through the end of 2009

Contracts are evergreen thereafter and require 180 days written notice for termination

HCA contract ended 12/31/06 Results have been better than projected

Commercial prompt pay discount agreement signed May 2007

$1,291.3

$1,623.5

$405.6 $445.7

$1,131.2

$962.2

$0.0

$500.0

$1,000.0

$1,500.0

2003 2004 2005 2006 Q3-06 Q3-07

Medical Premium Revenue Medical Premium Revenue TrendsTrends

19.1% CAGR($ in millions)

(1) Includes PDP revenue

(1)

9.9% CAGR

(1)(1)

Consolidated MCRConsolidated MCR

76.1% 75.3% 76.5% 77.3%83.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

2003 2004 2005 2006 YTD Q3-07

Consolidated MCRConsolidated MCRExcluding PDPExcluding PDP

76.1% 75.3% 76.5% 76.8% 77.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

2003 2004 2005 2006 YTD Q3-07

Consolidated Medical Consolidated Medical ExpensesExpenses

Pharmacy30%

Physician35%

Other16%

Hospital19%

Nine Months Ended 9/30/07Nine Months Ended 9/30/07

Physician45%

Hospital24%

Pharmacy12%

Other19%

Consolidated Medical Consolidated Medical Expenses Excluding PDPExpenses Excluding PDP

Nine Months Ended 9/30/07Nine Months Ended 9/30/07

$119.0

$141.9

$217.5

$175.0$157.9

$170.9

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

2003 2004 2005 2006 YTD Q3-06

YTD Q3-07

22.3% CAGR

Managed Care and Corporate Operations Segment ($ in millions)

Operating IncomeOperating Income

8.2% CAGR

(1)

(1) Excludes $58.9 million operating loss from Enhanced PDP

Consolidated Pretax MarginConsolidated Pretax Margin

11.4% 11.4%

12.2%

12.5%12.4%

10.8%

11.0%

11.2%

11.4%

11.6%

11.8%

12.0%

12.2%

12.4%

12.6%

2003 2004 2005 2006 YTD Q3-07

Managed Care and Corporate Operations Segment

(1)

(1) Excludes Enhanced PDP

$106.1 $117.3$89.4

$62.9 $68.9

$299.2$365.5

$307.4$265.2

$231.7

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

$450.0

12/ 31/ 03 12/ 31/ 04 12/ 31/ 05 12/ 31/ 06 9/ 30/ 07

Non-Regulated Regulated

Cash and InvestmentsCash and Investments

From Continuing Operations ($ in millions)

$382.5

$337.8

$388.6

$428.4

$376.3

Total External DebtTotal External Debt($ in millions)

$115 $115

$52 $44$21

$10

$75

$2

$0

$20

$40

$60

$80

$100

$120

$140

Dec-03 Dec-04 Dec-05 Dec-06 Sep-07

Debentures LOC/ Other

$21

$119

$52

$125$117

Senior Convertible DebenturesSenior Convertible Debentures

$115 million original issue on March 15, 2003 2.25% coupon rate $20.2 million outstanding as of April 25, 2007 Issued 10.4 million shares upon conversion Expensed approximately $1.5 million in prepaid interest

for conversion in 2005, $176,000 in 2006 and $434,000 in 2007

Expensed deferred financing costs of $1.2 million in 2005, $91,000 in 2006 and $187,000 in 2007

Share Repurchases from 1/1/03 Share Repurchases from 1/1/03 (1)(1)

Repurchased 29.2 million shares as of 4/25/07

$22.29 average repurchase cost as of 4/25/07

Share repurchase halted pending merger with UnitedHealth Group

(1) Adjusted to reflect 2-for-1 stock split effective December 30, 2005

Strategic ObjectivesStrategic Objectives

Achieve Commercial Premium Yields of approximately 4% before benefit buydowns

Achieve Commercial Unit Growth of 3 to 5%

Manage appropriately out of network hospital costs

Achieve EPS of $1.82 to $1.84 including the impact of the expected potential loss on the enhanced PDP offering and merger related expenses

Reconciliation of non GAAP measuresReconciliation of non GAAP measuresMedical care ratio (excluding PDP)Medical care ratio (excluding PDP)(1)(1)

GAAPOther Medical PDP Reporting

Medical premiums 1,157,127$ 213,873$ 1,371,000$ Professional Fees 42,519 - 42,519 Total medical premiums and professional fees 1,199,646 213,873 1,413,519

Medical expenses 927,135 245,462 1,172,597 Medical care ratio (medical expenses/premiums and professional fees) 77.3% 114.8% 83.0%

Non-GAAP ItemsNine Months Ended September 30, 2007

(1) The Company believes that reflecting the ratio excluding the effects of the PDP provides a more comparable measure of our medical care ratio to our historical results.

Reconciliation of non GAAP measuresReconciliation of non GAAP measuresPretax margin (excluding Enhanced PDP)Pretax margin (excluding Enhanced PDP)(1)(1)

GAAPOther Enhanced PDP Reporting

Total revenue 1,362,092$ 83,516$ 1,445,608$

Income before income taxes 169,161 (58,937) 110,224

Pretax margin (income before income taxes/total revenue) 12.4% -70.6% 7.6%

Non-GAAP ItemsNine Months Ended September 30, 2007

(1) The Company believes that reflecting the pretax margin excluding the effects of the Enhanced PDP provides a more comparable measure of our pretax margin to our historical results.

Sierra Health Services, Sierra Health Services, Inc.Inc.A Managed Care CompanyA Managed Care Company

Updated 11/6/07