October 7, 1999

                   Aetna Faces Class-Action Suit
                   Over Information to Members

                   By CAROL GENTRY
                   Staff Reporter of THE WALL STREET JOURNAL

                   A Philadelphia law firm has filed a lawsuit seeking class-action status
                   against Aetna Inc.'s Aetna US Healthcare unit, accusing the health plan of
                   withholding vital information from its members.

                   It is the second in a series of class-action suits expected to be filed against
                   health-maintenance organizations in coming days. The first suit, against
                   Humana Inc., was announced Monday.

                                        The Aetna case was filed late Monday in
                                        federal court in Philadelphia on behalf of
                                        Anthony Conte of Wilmington, Del., and all
                                        other members of Aetna US Healthcare's
                                        HMO plans who receive their coverage as an
                                        employee benefit. The lead law firm is Berger
                                        & Montague, which specializes in class-action

                   Officials at Aetna of Hartford, Conn., who received the court documents
                   late Wednesday, didn't comment on the specific allegations in the case.
                   The company issued a statement saying lawyers suing insurers target the
                   industry "for their own profits" at the expense of employers and families
                   who pay for care.

                   Aetna insures 21 million people, almost seven million of whom are in its
                   HMO, according to a spokesman.

                   Jerome Marcus, an attorney with Berger & Montague, said Mr. Conte
                   didn't suffer physical injury, but was nevertheless put at a disadvantage by
                   having vital information withheld from him when he enrolled, such as how
                   his doctor is paid. Doctors "get whacked" when they prescribe a drug or
                   treatment that falls outside Aetna's guidelines, Mr. Marcus said. A note
                   goes into the file, he said, and it affects the doctor's pay.

                   Aetna also gives doctors financial incentives to influence their medical
                   judgment, the lawsuit says. Yet the promotional materials and plan
                   summary presented to Mr. Conte and fellow enrollees don't describe those
                   incentives, according to Mr. Marcus.

                   Employees need the information to decide whether to subscribe, and if
                   they do, they need to know the payment arrangements so they can weigh
                   their doctor's advice more accurately and investigate other treatment
                   options more aggressively, the lawsuit states.

                   "This is not a case that says managed care is bad," Mr. Marcus said.
                   "We're agnostic on that question. We're saying [the financial information]
                   has to be disclosed."

                   While the legal theories in this case appear to differ from those alleged in a
                   class-action suit against Aetna that was dismissed by a federal judge last
                   week, the company said, some of the underlying issues may be similar.
                   Aetna said its practice "is to provide full disclosure on how physicians are
                   paid and how coverage decisions are made."

                   The latest suit against Aetna takes a different tack than the suit against
                   Humana of Louisville, Ky., which contained accusations of fraud and
                   violation of the federal antiracketeering statute. The Aetna suit asks the
                   court to find that the company has a fiduciary duty to provide accurate and
                   complete information about the nature of the benefits provided by
                   self-insured employers under the Employee Retirement Income Security
                   Act, or Erisa.

                   Wendy Parmet, a professor in health law at Northeastern University Law
                   School in Boston, said that while she doesn't know the details of this case,
                   it may be difficult to get this class-action certified because Aetna HMO
                   plans differ from employer to employer. In addition, she said, health plans
                   sometimes disclose payment information to the employer, but the employer
                   doesn't necessarily pass it on to the workers. Under Erisa, she said,
                   employees are entitled to an accurate summary, but not the whole plan,
                   which can be as big as a telephone book and is "incomprehensible to the
                   average lawyer, let alone the average employee."

                   Mr. Marcus said Erisa permits summaries, "but they have to be accurate."
                   Financial incentives that may distort the quality of care are of such
                   importance that they must be included in the summary, he said. The suit
                   seeks to force Aetna to make such disclosures and pay the costs of
                   bringing the suit and compensatory damages.