Delta Dental Wins Renewed Contract for Nation's Largest Voluntary Dental Program

September 26, 2007

Five-Year Renewal With New Benefits Affects 1 Million-Plus Enrollees

San Francisco/Sacramento, CA —Delta Dental of California announced today that the TRICARE Management Activity (TMA) of the Department of Defense awarded the company a new five-year contract to continue to administer the TRICARE Retiree Dental Program (TRDP).

The TRDP, authorized by Congress as part of the National Defense Authorization Act for fiscal year 1997, offers affordable dental benefits as a voluntary option to the nation's 5 million-plus uniformed services retirees and their family members. The new contract becomes effective on October 1, 2008. With current enrollment of over 1 million retirees and family members, the TRDP is already the nation's largest voluntary, all-enrollee-paid dental program.

The enhanced TRDP will feature some additional benefits once the new contract is effective, including certain implant services at 50 percent of allowable charges, an increase to the orthodontic lifetime maximum from $1,200 to $1,500 and 80 percent coverage for certain posterior composite restorations.

During the new contract period, the TMA also anticipates authorization to extend the TRDP to new overseas locations, matching as closely as possible the same benefits of the current "enhanced program."

"Based on the anticipated changes and expansion of benefits with fewer restrictions, we expect to see healthy growth in the TRDP continue over the course of the new contract period," said Delta Dental President and Chief Executive Officer Gary Radine.

The TRDP will continue as a national, combined fee-for-service/preferred provider program that offers enrollees access to any licensed dentist in all 50 states, plus the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana Islands and Canada. While enrollees may seek care from any licensed dentist in the service area, optimal benefits will be available to those enrolled retirees and their family members who choose a participating network dentist.

"Since the TRDP's introduction in 1998, Congress and the Department of Defense have steadily increased benefits, much to our delight and that of our TRDP enrollees," said Lowell Daun, DDS, senior vice president for Delta's Federal Services division.

A mandatory 12-month enrollment obligation continues, after which enrollees can remain in the program on a month-to-month basis. A more basic program remains closed to new enrollees, but will continue with no change in benefits for those already enrolled who wish to continue. The program still carries a $50-per-person-per-year deductible, with a family cap of $150, and an annual maximum of $1,200 per person, against which preventive and diagnostic services are not counted. Coverage for these services, as well as for basic restorative services, periodontic services, endodontic services, oral surgery and dental emergencies is available immediately on the effective date of coverage.

Crowns, bridges, full and partial dentures, certain implant services and orthodontics will be available after only 12 months continuous enrollment, payable at 50 percent.

As with the current TRDP, eligible retirees and their family members can find answers to their questions about the program as well as enroll using Delta's dedicated TRDP web site at www.trdp.org or by calling the toll-free number at 1-888-838-8737.

For San Francisco-based Delta Dental of California and its Federal Services division based in Rancho Cordova near Sacramento, this contract renewal allows the division to continue its significant contribution to its larger, nonprofit holding company's most recent growth. The holding company system, which includes Delta Dental of California, Pennsylvania and affiliates in 16 states plus the District of Columbia and Puerto Rico, covers nearly 22 million Americans. Last year, the enterprise posted consolidated revenues of $5.1 billion.

All the companies affiliated with the holding company system are also members of the national Delta Dental Plans Association, which collectively covers approximately 50 million Americans.

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