PMI Dental Health Plan Merges With Parent Company Delta Dental of California

January 2, 2007

Single License Allows for Easier Administration, Streamlined Processes

San Francisco, CA —PMI Dental Health Plan, one of the largest prepaid dental plans in California and the nation, announced today its merger with parent company Delta Dental of California.

The merger — just approved by the state’s Department of Managed Health Care (DMHC) — is effective January 1, 2007. While the immediate effect of the merger will be transparent to customers and enrollees, company officials say it will streamline administration and eliminate duplicative processes.

PMI, based in Cerritos, Calif., has operated under a separate health care service plan license since its acquisition by Delta Dental in 1985, offering and administering the DeltaCare USA prepaid dental product in California. PMI’s role as national administrator of the DeltaCare USA program shifts to Delta Dental of California, whose subsidiary Delta Dental Insurance Company will serve as a third-party administrator for its marketing affiliates and other Delta Dental member companies in the District of Columbia plus 17 additional states: Alabama, Arizona, Colorado, Connecticut, Florida, Georgia, Maryland, Nevada, New Mexico, New York, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Washington and West Virginia.

"This is a beneficial situation for our customers and our company, as it will make for a smoother and less confusing operation, particularly where we offer DeltaCare USA side by side with our national network-based fee-for-service programs," said Gary D. Radine, president and CEO of Delta Dental of California and its affiliated companies.

He added that the merger did not require any staffing or administration changes, as the two companies for some time integrated functions and responsibilities.

"The big advantage is that the merger allows us to integrate all of our products under the single license," Radine said.

Plan benefits for PMI’s 1.2 million DeltaCare USA enrollees will remain unchanged as a result of the merger, as will all related group and dentist contract and processing policies.

Delta Dental of California and its affiliates, with $4.7 billion in revenues last year, are part of a holding company with nearly 21 million enrollees in 16 states plus the District of Columbia. Affiliated companies within the holding company system are also part of the larger Delta Dental Plans Association (DDPA), based in Oak Brook, Ill. DDPA consists of 39 Delta Dental member companies licensed in all 50 states. The association collectively covers about 46 million of the 159 million people nationwide with private dental insurance, making it by far the largest national system of dental plans.

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