Welcome to the WellPoint Inc. quarterly results conference call. (Operator Instructions) I would now like to turn the conference over to the company's management; please go ahead.

Good morning and welcome to WellPoint's second quarter earnings call. I’m Michael Kleinman, Vice President of Investor Relations. With me this morning are Angela Braly, our President and Chief Executive Officer; Wayne DeVeydt, Executive Vice President and Chief Financial Officer; Ken Goulet, Executive Vice President and President of our Commercial Business and Brian Sassi, Executive Vice President and President of our Consumer Business. Angela will begin this morning's call with an overview of our second quarter challenges, actions and accomplishments. Wayne will then offer a detailed review of our second quarter financial performance and current guidance, which will be followed by a question-and-answer session in which Ken and Brian will also participate. We will be making some forward-looking statements on this call. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of WellPoint. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review the risk factors discussed in our press release this morning and other periodic filings we make with the SEC. I will now turn the call over to Angela.

Good morning and thank you Michael. In the second quarter of 2008 we began to see a number of improvements as compared to the first quarter. Our GAAP net income was $1.44 per diluted share and included $0.03 per share in net realized investment losses. We had another quarter of record premiums and revenues. Both are benefit expense ratio and selling, general and administrative expense ratio declined sequentially contributing to a 35% sequential increase in pre-tax income. We now expect full year 2008 earnings per share to be in the range of $5.42 to $5.57 which includes $0.06 per share in net realized investment losses. Based upon results through the first six months of the year, including membership mix changes, lower expected fully insured membership and our settlement of certain California rescission issues; we have narrowed the EPS guidance range we provided last quarter. Wayne will update our second quarter financial results in detail later on this call but first I’d like to take a few minutes to discuss membership, competition and the actions we have taken and steps we’re continuing to implement in order to improve our performance for the rest of 2008 and beyond. At June 30, 2008 our medical enrollment totaled approximately 35.3 million members, an increase of more then 500,000 members or 1.5% from 34.8 million at June 30, 2007. Enrollment in our national business increased by 626,000 including 319,000 new national account members and 307,000 Blue Card members. National accounts are among the most sophisticated groups in evaluating buying decisions and these results show that they continue to appreciate the value proposition, the product and the services we provide. Local group membership in our Blue states increased by 222,000 members over the past 12 months while our non-Blue, UniCare and Health Link business declined by…

Thank you Angela and good morning. I also believe that we are making good progress on our performance improvement plans and I think this is reflected in our 2Q 08 results. In the second quarter of 2008 premium revenue reached $14.3 billion, an increase of $409 million or 3% from the prior year. This increase was driven by rate increases across all medical lines of business and growth in our Medicare Advantage products partially offset by the loss of the New York State prescription drug contract and lower fully-insured commercial and state sponsored membership. As Angela noted, we achieved our targeted commercial price increases in the second quarter although this contributed to a slightly higher level of membership attrition then we anticipated. We also continue to see benefit buy-downs this year including continued migration into higher deductible and consumer driven health plan offerings. In fact our CDHP membership has grown to 1.7 million as of June 30, 2008 an increase of 466,000 or 38%. Compare this with this time last year. Our fully-insured CDHP membership has grown by 340,000 or 54% over this period. Offering CDHP and other high deductible product as compliments to our more traditional product designs allows us to target a variety of audiences in our efforts to grow and retain profitable fully-insured membership. Administrative fees totaled $966 million in 2Q of 2008 an increase of $43 million or 5% from 2Q of 2007. This was driven primarily by revenue for medical management programs offered by our comprehensive health solutions business and strong self-funded membership growth. We continue to be a market share taker in the ASO business due to our superior value proposition. In total our self-funded enrollment increased by 1.1 million or 6% from June 30, 2007. The benefit expense ratio was 83.3% in the…

(Operator Instructions) Your first question comes from the line of Doug Simpson - Merrill Lynch

Could you just update us on the systems migration process, I know you’ve put some of that on hold, how are you thinking about that over the next couple years as you’re coming up with your budget and just how does that impact your confidence, what types of swing factors do you put in there for that dynamic?

Right now our focus for this year obviously is resolving the previous migrations of which again the host migration is the primarily open one that we’re getting final closure on and we expect that closure by the end of this year. I think the one thing I would say is that prospectively consolidation of systems will still be an imperative for us to become a more efficient company. That being said I think there were clearly some lessons learned over the last year and a half around those migrations and the approach we will take and I do think that standardizing some of the product portfolio that we’re doing today and simplifying some of our processes will not only provide a more smooth transition but in addition to that I think we will bite off a number of migrations on a smaller basis as we move forward.

Right now we have about almost 85% of our membership is on one of our top six platforms and we do still expect to migrate claims systems but as we talk about standardizing process they are really opportunities for us to standardize certain functionality across the different systems. So it might be a customer facing part of the system, it might be all the claims editing is going to be consistent across the enterprise and then as we do the migration there will be much less risk and it will not affect the customer from the customer facing perspective as we’ve rolled out more consistent processes facing the customers. So we don’t feel like we’re skipping a beat here, we are looking at the way that the migrations have been executing, as Wayne said learning from those and making sure we have goals about that because ultimately what we want to do is reduce the lights on cost and reinvest those savings in projects that really address cost and quality of health care.

The cash flow this year expected to be roughly equal to net income, is that relationship that sort of one to one is that reasonable to expect for the next couple of years?

I think the question on that is really going to be driven by how the fully-insured membership continues to evolve. I think when you look at the one to one ratio this year, there are a number of unique drivers but I would clearly expect just from a pure quality of earnings perspective that we should be maintaining at least a one to one ratio relative to that and as we can get our new membership programs, our new products to drive new membership growth you would begin to see that actually move upwards within the one to 1.2 range over time. But again I think as we stabilize the membership base we have a lot of initiatives going out both the second half of this year and early next year, but at a minimum it should be a one to one ratio.

Your next question comes from the line of John Rex – JP Morgan John Rex – JP Morgan: Appreciate the commentary on the headwinds, tailwinds as you contemplate 2009 and I just wonder if—understand you don’t guide until the end of the year, not looking for an EPS guidance here but as you take into consideration the economy as it stands today and just making the assumption that it doesn’t improve it doesn’t get any worse but stays where it is, and you think about those headwinds, tailwinds, give me the broad side of the barn in terms of management sense, operating earnings 2009 up down or flat from the 2008 level.

We literally will be presenting our three year plan to The Board in the next month and then we’ll be finalizing our operating plan. I don’t want to get ahead of my Board on that. Clearly there are a number of tailwinds that would clearly allow individuals to see significant upside. At the same time we don’t want to minimize some of those headwinds at this point in time. So I’m not trying to be evasive, I just want to be respectful of the process that we have for our Board and for others, but obviously we recognize that a number of things should not repeat next year and we should see improvement in our senior business, our reserves appear to be strengthened, and [inaudible] improved as well. And we continue to execute on our buyback program but again I want to be respectful of our Board.

As you describe the question initially you talked about expecting things not to really change, that’s why I think we described some of the headwinds that we’re facing. We know that in the state sponsored business there’s some headwinds around state government budgets. We know we have to have actuarially sound rates. We’re assuming that that continues. We’re being appropriately disciplined and focusing on actuarial principals around our pricing because we expect things to continue in terms of a tough economy and a competitive environment. And the way we win in that environment is we develop new products, we have a very strong brand, we look at places where we can improve the network even more, even though its market leading in most places. We do agree in your original question that there’s some headwinds we’ve been facing and we’re assuming that those are to continue to persist and we’re going to develop new and better ways to meet the customers’ need in that environment. John Rex – JP Morgan: If it came though would you be startled if operating earnings were down in 2009 given kind of what you know today, would that just be absolutely startling or at this point do you say 50/50 we don’t know.

While I don’t want to get ahead of my Board what I would say is this, we are going to take all the appropriate actions including the pricing that we’re filing now for next year and we are making assumptions that trend is not staying flat, we are assuming that trend is going to move up next year. And we are pricing accordingly. How competitors respond in that environment I don’t know and what impact that could have on us I don’t know. What I do know is we’re going to remain disciplined so if people respond in a fashion we expect them to respond our outlook would change but we’ll see how that all evolves at this point in time. We are doing a lot of things that should drive positive growth but nonetheless some of these headwinds are out of our care and custody and we’ve got to see how they evolve.

Your next question comes from the line of Matthew Borsch - Goldman Sachs

On the commercial fully-insured business, in your remarks you commented on some things that you were seeing in terms of competitor actions, rate guarantees and you listed a couple others, can you give us a little more on that and juxtapose that with your efforts to grow fully-insured enrollment and where you’re having success, maybe what geographies that you think you’ll be successful there and where you think its going to be more of an uphill battle and then just in that context, it looks like your outlook for the back half of the year is that your commercial fully-insured enrollment will be approximately stable, let me know if I got that wrong.

I’d like to respond to a couple of things the competitor side and then our own areas of growth, on our own positioning we feel we have really a good advantage overall because of the market share we have in each of our Blue states and I think you know the data, four of our plans have over 40% market share, four over 305, and six over 20%. We had to go through some pricing activity this year to make sure that our pricings were accurate and most of our declines in our fully-insured business was in our non-Blue business where we do not have the same network advantages and where we were doing some price corrections to be able to firm up the business overall. We do anticipate stable through year end and we’ve gotten through most of our rate actions. Our rate actions did produce slightly higher losses in the west then we anticipated in our forecast but that we held disciplined in our pricing and it was only slightly greater. Our growth is more in the northeast with our Prism product which was newly rolled out and the Prism product has been a very good product. We feel that we are comfortable where we are. We have some fairly significant new benefits going out in California with three new products rolling out in the third quarter and in the southeast we have new products rolling through and have a much more disciplined and robust annual benefit change process going into place into all of our areas. On the competitive front I would say rational but aggressive—the rate caps in other areas are primarily from local competitors rather then from the national competitors and they’re doing that essentially to offset some of the advantages that we have so when you see a premium holiday I do not see that from any of the national competitors but we do see it from some of the local competitors to try to offset our advantages and make a buyer look at a one year buying decision rather then a long-term buying decision. We feel that we had the majority of our rate changes going forward we’re excited about the product enrollment enhancements we have. They are rolling out across different areas of the country. But feel pretty comfortable for year end.

In terms of fully-insured membership we are seeing the declines at slightly more then we expected and we’re projecting more particularly in UniCare then we had originally projected but one thing that’s really positive is we’re looking at the active cancelled loss ratios for the fully-insured book and its actually much more positive then we had expected before so we are keeping good members and healthy lives that we had been concerned about in the past but our active and cancelled loss ratios are looking better then we had thought.

That is true, in our individual book of business we’re actually having the best sales year that we’ve had in our history. That is being partially mitigated by higher then anticipated lapses which are really driven by two factors. One is the economy and two is some of the competitive rating pressures but we are essentially our outlook for the remainder of the year is stability in terms of membership from both individual and senior business.

Your next question comes from the line of Justin Lake – UBS Justin Lake – UBS: In regards to thinking about pieces to 2009 and I realize the economy is the big wildcard and certainly don’t want to ask you to make a projection there, but as I think about the margins for the business should be—are something that I think would be much closer to your control and something that is certainly being debated around throughout the industry as just the whole underwriting cycle and what the margin trajectory of the business really is, given all you’ve talked about with the re-pricing actions given that you’ve actually had the experience now of putting through these big rate increases and how the market accepted them in a tough economy, what you’ve actually been able to do in Medicare Advantage as far as changing your benefit designs for 2009, while I understand the economy being a wildcard to plus minus can you at least to talk to kind of what’s under your control on a margin side and do you think that there’s something you could talk to as far as the margins for next year and whether you think there’ll be some improvement because when you think about the net headwinds, tailwinds especially the underwriting margins.

I think what we’re going to continue to focus on our three year plan and our annual planning process and be in a position later to give better guidance on that. You brought up a couple of actions though around how we have re-priced, we’re seeing those go through, the rate actions are holding, and we did change the Medicare Advantage. In terms of expectations in 2009 the bids are in, we don’t know where we stand relative to that.

Can’t really talk to specifics on the bids, the bids are in and we’re expecting to hear back next month relative to that. But we are expecting improvement in operating margin as a result of plan changes and some of the plans that we’re experiencing higher then expected losses on this year. We did not re-file in specific geographies. So I think those two actions will result in underwriting improvement in our senior line of business.

Our active versus cancelled loss ratios even after these recent rate increases are looking positive and so those are the indicators of clearly being able to continue that trend and get appropriate margin expansion but as we’ve said we’re pricing with discipline for next year. We hope others will maintain that same level of discipline but if that isn’t there obviously that will impact ultimate op gain if we have to suffer another year of membership attrition and again we’re not going to go chase this business. We are going to maintain our margins and continue to try to find ways to expand those margins through G&A efficiencies. Justin Lake – UBS: On the commercial pricing side, is there anything more that you can give us, you talked about California for instance being a place where you put through some pretty big increases and we’ve heard the [inaudible] numbers and is there anything you can talk about as far as what kind of attrition you normally see in a year versus what you’re seeing now and how that was versus your expectations, just put some numbers around it so we can think about that from a total book perspective.

We had as you know as we went into the year we had adjustments in pricing across the board and in different geographies. In California we did increase more in our consumer driven plans and the losses were modestly more then what we had forecasted when we did our March forecast and our restatements. It’s pretty much trending like it does annually. We have right before our [inaudible] renewals we have activity first where we have our biggest month of increases and then we have our lowest month of sales. That occurred as it annually does occur but what happened was with the rate increase since we had anticipated a little more attrition then normal it is more then it was last year but only modestly higher then we had projected but that is the one area where there was more losses then what we had put into our recovery plan. Justin Lake – UBS: Can you just put a number around that, if the attrition is 20% previously is it 30% now?

We really don’t provide on a state specific basis. It’s difficult to say but all I would say is its very modest, based on size of book, very modest. Justin Lake – UBS: So less then 5%, greater?

It would be less then 5%, correct.

Your next question comes from the line of Charles Boorady - Citi Charles Boorady – Citi: By how many points is the Medicare Advantage book now below your target? I recognize you don’t provide loss ratios, can you at least tell us the number of percentage points below your target you’re at with MA, sounds like its deteriorating a bit more then expected and then how you’ll achieve the tailwind from MA in 2009. You talked about the pricing of benefit decisions but how is that going to manifest itself in 2009 in terms of likely drop in enrollment that might result and likely improvement you think you can achieve in the overall profitability next year.

As you know we don’t obviously provide specific details by product, what I will say at this point though is that the net advantage has deteriorated slightly more then we thought partially because we added a number of members in those particular products that we were having issues with in the second quarter about 30,000 members or so. And so one of the things is we expect the continued deterioration of that through the second half of the year. That being said, one of the concerns we had going into next year was whether we could make all the appropriate benefit changes on certain products and as Brian mentioned we actually made a conscious decision not to renew those products at all, we actually did not resubmit those products and so one of the reasons is that we expect to see obviously some positive tailwinds there is that it is those particular products that we are having our issues with. It’s not the broader Medicare Advantage program in and of itself.

From an enrollment standpoint we’re likely to see a modest decline as a result of not re-filing some of the enhanced plans in select geographies. Additionally we made benefit changes to some of the non-enhanced plans and the sum total of those two changes we’re expecting to reflect in increased operating gain. We expect to continue to be very well positioned in the Part D segment in 2009 also. Charles Boorady – Citi: Can you give us any numbers at all or just rough numbers like is most of your book at your target level of profitability but you’re losing money in enhanced or is your whole book below your target level of profitability.

The entire book is not below our target profitability it is in select product designs which we have addressed in the 2009 bid process. Charles Boorady – Citi: So will dropping enhanced get you to your target level of profitability next year?

That’s what we’re projecting. Charles Boorady – Citi: How many basis points below your target are you on the book, or how much higher is your loss ratio overall then you target?

We don’t share loss ratios by product.

Consolidated it’s about 45 bps but again we don’t do it at a product level. Charles Boorady – Citi: It contributed 45 bps to the increase year-over-year?

Yes.

Your next question comes from the line of Joshua Raskin - Lehman Brothers

Just want to clarify on the cost trends, just looking at the press release the 90 basis points in terms of the year-over-year impact, that’s the same impact that we saw in the first quarter and the reason the MLR was up last year-over-year in the second quarter versus the first quarter was mainly because you saw a little bit of improvement on the MA side?

Couple of things, obviously we’ve written a lot more Med Part D this year then we did the previous year and remember our seasonality patterns there because of the product designs we had actually put even more MLR downside pressure on the MLR in the first quarter and we’re seeing that online in the second quarter so while overall Medicare Advantage isn’t necessarily improving the Med Part D seasonality is starting to come through and we’re seeing those improvements and that’s actually doing well for us at this point in time. So that’s one of the drivers in that year-over-year comparison and quarter-over-quarter.

But obviously nothing on the commercial side that you saw nothing got worse on any of that?

No commercial is actually slightly better then our expectations and we think the eight plus or minus 50 basis points is very good but I will say that while we think it appears the trends have stabilized we are assuming for pricing next year a rising trend.

In the press release you also talked about account retention programs, and then I saw broker incentives, what exactly are account retention programs, is that done from a pricing perspective or are there other service type of guarantees and improvements you’re making.

There are a number of things that we’ve put in place in both our individual and we’re also beginning to leverage it in our senior book of business where we’re actually making outreach calls to members that have indicated a desire to cancel and our early returns in the last six months are that we’re retaining 70% to 80% of the people that we actually contact into plans so that’s a successful program. As well as we’ve implemented health plan advisors in a number of our geographies and they really are higher level people, very familiar with different plan designs to really assist members instead of dropping coverage, moving to a more appropriately priced product for what they’re looking for.

And with the employer group or the commercial side we’ve instituted in national accounts and many of our large group areas a process called the WAR room or Winning at Renewal where we are reviewing all aspects of an account before going out to make sure we’ve being consultative in our approach to looking at alternatives to meet the client needs and it is helping in our overall approach to being a consultative partner to the customers, pricing appropriately, finding the right margins but also working together to find the right approach and the WAR room has helped our overall activity. We’ve also done some very detailed pricing analysis across all lines of business and as mentioned earlier our active cancelled ratios are in the positive and we have spent a lot of time looking at where we need to make sure we always hold the line and where we can be flexible on some more cases that are running very well. We’ve started to roll that out across more and more geographies.

Your next question comes from the line of Scott Fidel - Deutsche Bank

Just wondering if you could elaborate a bit more just on the outlook for the early read for 2009 medical cost trends and I know you said you’re assuming a bit of an uptick, if you could talk about the magnitude of that and then just looking at the individual components maybe where you see the most risks to acceleration and then areas where you can potentially see some improvement in 2009 relative to 2008.

For competitive reasons obviously we don’t typically talk about the level of increase but I’ll try to give you some overviews and again this will vary by geography and by product but what I would say is we are assuming in our pricing the trend will be moving upwards and probably the best way to describe it at a competitive level is I know that one public competitor has already discussed the level and I would say that level is very reasonable. It’s probably the best way for me to describe it regarding overall upward trends that we may be expecting. That being said there are a number of things that could impact that and one of the items that could actually put downward pressure on that trend really is going to be mix shift in the business and how that evolves. So for example if we continue to see more higher deductible products more within the CDHP programs and that evolve that actually can actually drive down the pay trends even more then what we thought underlying trend would be. So one of the items that could be distorting to the trend numbers could actually be the mix shift and it could actually show what might be a favorable trend but its more of a mix shift more then underlying trend itself. So one of the things we are doing though is when we price for next year as we look at what we believe core underlying trend is and we price for that and then we modify it based on the actually products in the mix shift versus using mix shift in that pricing decision upfront. We actually do it on the backend so I think that’s one item that could clearly impact it. The other thing is we do price so that our [premium yields] do include total medical costs trends and again that includes SG&A as well and then obviously try to leverage our SG&A accordingly.

I know that one competitor which I think had cited a 50 bps increase expectation for next year they had also just talked about seeing some increases in their behavioral costs just relative to utilization which they thought might be economic related and just given that you have a pretty big behavioral book, if you can talk about what you’re seeing around costs in the behavioral business at this point.

We’re not necessarily—the economy doesn’t usually appear to have a major driver on the behavioral utilization at least in 2008. There’s often a lag though during economic downturns and there’s more use after job loss when individuals are experiencing stress in the workplace so we’re obviously taking that into consideration though as we look to our pricing for next year but as it relates to 2008 we’re not necessarily seeing those behaviors changing. Also the effects of the Timothy Law in New York, those were largely felt in 2007 and those were incorporated into our 2008 trends in pricing so I think we’ve got a relatively good baseline for that.

Your next question comes from the line of Peter Costa - FTN Midwest Securities

You’ve taken another $220 million charge to equity for your portfolio is there anything in there that’s not paying dividends currently and then on your inpatient prices mostly but costs overall you said it went from upper single-digits last quarter to low double-digit this quarter, is that more out of network costs or that more higher prices at negotiated rates in your Blue markets or is that something else or is it the non-specific volume of large claims that you talked about in the first quarter?

Let me start with the latter part, again its 95% of it is really is unit cost at this point in time and something we continue to look at on our contracting. In terms of the portfolio we do have under 10%, I don’t have the exact percent in front of me, I know its south of 10% in terms of equity and while some of those equity portfolio is paying a dividend a substantial portion of it is in dividend paying and again its part of our policy just to remind you how we treat equity, if an equity is underwater by $1.00 after 12 months we will write that down. And in addition take that through our P&L. And if its underwater by 20% in six months we will write that down to that value even though we haven’t sold the underlying assets so a big part of what you’re seeing there is within the equity portfolio and obviously we’ll file our 10-Q today and I think when you look at that, you’ll see that the vast majority of that impact for unrealized losses that we’ve run through the P&L as well as the pressure you’ve seen on the overall reduction for the unrealized gain loss position is coming from the equity portfolio and what’s happening in the current equity markets.

I was actually talking about what didn’t run through the P&L, what went straight to the equity line.

Well again, you’ll see the unrealized gains and losses being again almost primarily driven by the equity portfolio as well. So for the assets we still hold that haven’t met that criteria we are marking to market those every month and every quarter. So as the markets slide down and as we’ve all seen with the dollar lose almost 2,000 points just in the last three months, that impact does run directly through our equity as an unrealized loss or said differently, many of those were in an unrealized gain position and that gain has come down substantially so if you actually look at our total portfolio its in a very slight loss position but again that’s more market based timing and as we all know if the market starts to turn around and recover that will shift back to a positive number in the next quarter.

You did say it was price on the hospital side of things, you didn’t say whether that was out of network prices that are higher or is that in network prices that are higher.

It’s likely both. We’re saying 85% is really driven by unit costs or 95% in terms of inpatient and it could be both. We’re addressing unit costs and utilization focused on our contracting, our medical clinical management. We’ve put some specific focus around nicu and oncology because we saw those as drivers early in the year and so we’re looking carefully and working on programs around that as well.

It’s mostly in network.

Your next question comes from the line of Carl McDonald - Oppenheimer Carl McDonald – Oppenheimer: In the past you’ve talked about not just pricing to trend in 2009 but trying to make up at least a portion of the 90 basis points of mispricing this year, is that still your intent for next year?

We’re obviously in areas where we believe we can make up for that delta and appropriately price without having attrition that would cause active loss cancelled ratios to be distorted. We’re obviously trying to bake that into pricing. In other areas where it is extremely competitive we will not be able to get that full 90 basis points, we recognize that without having a negative impact, we think to the broader company and so we are looking at that very strategically by market so but I don’t want anybody to assume that there’s going to be an additional 90 basis points tacked onto pricing on an enterprise wide basis, that is not the case.

That’s something that over time will work back, but you cannot do a one-time increase to recover or else your trend increases are different then other carriers and it will drive more looking at alternatives so we balance it appropriately according to how well we are positioned in each market. But it’s something that we’ll earn back over time. Carl McDonald – Oppenheimer: We’ve heard from both Aetna and WellPoint in the last month or so that they really haven’t seen competitors doing any kind of material increase in pricing for 2009 relative to the rate increases this year, is that consistent with what you’ve seen overall?

We’re seeing rational pricing. We are sensing that pricing is continuing to firm up in certain areas. I think that others will see where our pricing has made changes and where we’ve recovered in certain areas but I think it’s safe to say that it’s consistent with prior years but I do believe I am seeing others recognize a slight increase in trend for next year as well. Carl McDonald – Oppenheimer: When do we actually get into the heart of the January 1, 2009 full risk renewal season?

The full risk renewal season is believe or not, not until last quarter and literally into the for a small group, into the November, December timeframe. It really is finalized during the last portion of the year. The ASO is well into it right now, but its all last quarter. We’ve done some large group renewals at this point and we’ve also had some large group sales activity for 01/01 of next year. We captured a pretty nice $23,000 life fully-insured case but the general, the majority of what we do is in the last quarter.

Your final question comes from the line of Mike Baker – Raymond James Mike Baker – Raymond James: On the unit cost trends on the inpatient side, have you seen any change in coding intensity by hospitals contributing to that?

You know I can’t say that we’ve seen that necessarily happening although I will tell you that our medical management group is continuing to evaluate bundling that may or may not be happening and how they’re applying some of those DRG codes and CBT that they’re doing there but I don’t think we’re really seeing that at this point.

No, there’s one area that we didn’t bring up earlier, there is the hospital consolidator in the west who is purchasing hospitals and immediately dropping out of network of all carriers to try to—so we do see a slight increase there of out of network in the west. That is being legally challenged not through ourselves but through the government and other areas. It’s being looked at so that’s where I’ve seen the most significant change. But in hospital intensity I think it’s consistent with what it has been in the past and have not seen a significant change.

As we rollout and have consistent claims editing processes on our side we can really start to see where there’s variation across the country and then target our cost of care and management activities towards places where we’re seeing variation. So it’s going to be a powerful thing. I really do appreciate and thank you for your questions. In closing I want you to know that we are responding aggressively to help ensure achievement of our goals and this includes implementing actuarially sound rate actions and executing on cost optimization opportunities to achieve our financial objectives. We’re introducing innovative products to improve our competitive positioning. Our leadership team is in place. We’re gaining traction and we’re executing on our growth initiatives, product development, simplification plans, specialty integration strategies, and we’re driving for sustainable long-term results. I want to thank you all for participating on the call this morning.