Universal American Financial Corp. Completes Acquisition of Heritage Health Systems; Accelerates Entry into Medicare Advantage Market S&P Rates Universal American's Debt "Investment Grade

Rye Brook, N.Y. -- Universal American Financial Corp. (NASDAQ: UHCO) ("Universal American") announced today that it has completed the previously contracted and announced acquisition of Heritage Health Systems, Inc. ("Heritage") for $98 million in cash.

Founded in 1995, Heritage operates Medicare Advantage plans in Houston and Beaumont, Texas, and has approximately 16,000 Medicare members with annualized revenue of approximately $132 million.

"This acquisition is an ideal fit for Universal American as it accelerates our entry to the Medicare Advantage market and expands our position as one of the leading providers of life and health insurance products to seniors," stated Richard Barasch, Chairman and CEO of Universal American. "With the addition of Heritage, recently obtained approvals to offer Medicare Advantage programs in the Northeast and our new Medicare-approved prescription drug discount card, our senior market product mix is one of the most comprehensive in our industry."

Mr. Barasch continued, "Heritage has continued to perform well since the announcement of the acquisition in March 2004 and has begun to pick up marketing momentum. Our Senior Solutions centers in Houston/Beaumont area are embracing the opportunity to enlarge their product line by offering a managed care product. We expect the acquisition will be immediately accretive, adding approximately 5% to 7% to the balance of 2004 earnings."

The transaction was financed with Universal American internal cash of approximately $33 million plus the proceeds of an amended and increased senior credit facility arranged by Banc of America Securities LLC. Standard & Poor's has assigned a 'BBB-' rating to this $120 million credit facility.

Mr. Barasch commented, "We are gratified by the reaction of this rating agency toward this transaction. This is the first time Universal American has been given an investment grade rating on its debt and we believe it is a testament to the strength of our operations and the quality of our balance sheet."

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