Highlights:

• BCBSNC affected by economy but finances, membership stable

• Medical spending for customers increases

• Profit margin declines

Chapel Hill – In 2009 Blue Cross and Blue Shield of North Carolina (BCBSNC) continued to see
stability in its customer base and financial performance, despite a difficult economy.
“During this down economy, when many insurers have lost customers, Blue Cross is holding its own.
We remain strong and viable and focused on meeting the health care needs of our customers every day,”
said President and CEO Brad Wilson.

BCBSNC had a net income ratio (profit margin) of 2.1 percent for 2009, equating to just 2.1 cents for
each dollar of revenue. That was down from 3.6 percent in 2008 and below the company’s target range
of 3.5 to 4.5 percent. The company’s profitability was affected by higher medical costs and slower
membership growth due to the state’s down economy. The company’s consolidated net income was
$107.3 million with total revenue at $5.2 billion.

During 2009, BCBSNC spent more of every premium dollar on the medical care of its customers –
nearly 87 cents per premium dollar compared to just over 85 cents in 2008. Included in the increased
medical costs this year were costs associated with H1N1 and seasonal flu, as well as an investment the
company made in waiving its customers’ generic drug copayments for the first six months of 2009.
Most of the remainder of the premium dollar went toward customer service and technology investments
to support its products and service.

For the last four years, BCBSNC has encouraged the use of generic drugs to help hold down medical
costs and make it easier for consumers to afford their medications and stick to the regimen prescribed by
their doctor. The use of generic prescriptions went up nearly two percentage points to approximately 68
percent from December 2008 to December 2009.
The company spent more than $4.0 billion in claims and medical expenses during the year for its insured
customers, compared to $3.9 billion for 2008. The company paid a total of over $11.3 billion for both
insured and self-funded customer claims.

The company’s overall membership exceeded 3.7 million in 2009, which is essentially flat compared to 2008. This includes approximately 900,000 served on behalf of other Blue plans.
As a fully taxed company, BCBSNC incurred nearly $134 million in local, state and federal taxes in
2009.

The company continued to rank as one of the Triangle’s top ten private employers. BCBSNC’s
workforce was over 4,600 at the end of 2009.

Blue Cross and Blue Shield of North Carolina is a leader in delivering innovative health care products, services and information to more than 3.7 million members, including approximately 900,000 served on behalf of other Blue Plans. For 77 years, the company has served its customers by offering health insurance at a competitive price and has served the people of North Carolina through support of community organizations, programs and eventsvthat promote good health. Blue Cross and Blue Shield of North Carolina is an independent of the Blue Cross and Blue Shield Association.

For more information on health insurance coverage in North Carolina, please visit our website at www.nchealthplans.com or call our toll free number 888-765-5400 and speak with one of our qualified agents. Our agency provides coverage for health insurance in North Carolina through Blue Cross Blue Shield of North Carolina (BCBSNC). You may qualify for a 15% healthy lifestyle discount if you are in excellent health. Call us for details.