Summary of UNIVERSAL AMERICAN CORP.

ITEM 2-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

The following discussion and analysis presents a review of our financial condition as of March 31, 2009 and our results of operations for the three months ended March 31, 2009 and 2008. You should read the following analysis of our consolidated results of operations and financial condition in conjunction with the consolidated financial statements and related consolidated footnotes included elsewhere in this quarterly report on Form 10-Q as well as the consolidated financial statements and related consolidated footnotes and the Management's Discussion and Analysis of Financial Condition and Results of Operations included in our annual report on Form 10-K for the year ended December 31, 2008. You should also read the following analysis in conjunction with the Risk Factors contained in the current report on Form 8-K that we filed with the Securities and Exchange Commission on May 4, 2009, as supplemented by the risk factors set forth in Part II, Item 1A "Risk Factors" below.

Significant First Quarter Items

º •
º Revenue increased 11.2% over the prior year quarter to $1.4 billion.

º •
º Senior Managed Care-Medicare Advantage membership remained consistent with the first quarter of 2008.

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º Net retained Part D membership increased 122,000 from the first quarter of 2008.

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º Senior Managed Care-Medicare Advantage medical loss ratio of 80.8%, including $15.3 million of prior year development.

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º First quarter diluted loss per share narrowed 68% to $0.16 from the first quarter of 2008.

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º Repurchased 2.7 million of our shares at a cost of $21.9 million.

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º Recorded a charge of $8.1 million for the other-than-temporary impairment of investment securities.

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º Closed the transaction to reinsure substantially all of our in force life insurance and annuity business under a 100% coinsurance treaty with two insurance company subsidiaries of Goldman Sachs Group, Inc. (NYSE:GS).

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Membership

The following table presents our membership in Medicare Advantage and Part D products as of March 31, 2009 and 2008.

Membership by Segment

As of March 31, 2009 2008 (in thousands)
Medicare Advantage
PFFS 173 182
Network-based (HMO and PPO) 63 51

Total Medicare Advantage 236 233

Part D CCRx 1,280 1,309 PRx(1) 420 269

Total Part D 1,700 1,578

Total Membership 1,936 1,811

º (1)
º 2008 amount represents net retained membership for our Prescription PathwaySM PDP, which was succeeded in 2009 by Prescriba RxSM. While membership in PRx is 100% retained by us, Prescription PathwaySM was operated in connection with a 50% joint venture partner. Actual membership at March 31, 2008 was 537,000.

Critical Accounting Policies

There have been no changes in our critical accounting policies during the current quarter. For a description of significant accounting policies, see Note 2-Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2008.

Sensitivity Analysis

The following table illustrates the sensitivity of our accident and health IBNR payable at March 31, 2009 to identified reasonably possible changes to the estimated weighted average completion factors and health care cost trend rates. However, it is possible that the actual completion factors and

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health care cost trend rates will develop differently from our historical patterns and therefore could be outside of the ranges illustrated below.

               Completion Factor(1):             Claims Trend Factor(2):
                             Increase                            (Decrease)
                           (Decrease) in                        Increase in
           (Decrease)      Net Accident      (Decrease)         Net Accident
            Increase         & Health         Increase            & Health
           in Factor           IBNR          in Factor              IBNR
                                    ($ in thousands)
          (3)%             $        2,056             (3 )%    $       (12,287 )
          (2)%             $        1,370             (2 )%    $        (8,191 )
          (1)%             $          685             (1 )%    $        (4,096 )
          1%               $         (685 )            1 %     $         4,109
          2%               $       (1,369 )            2 %     $         8,218
          3%               $       (2,053 )            3 %     $        12,326


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             º (1)

º Reflects estimated potential changes in medical and other expenses payable, caused by changes in completion factors for incurred months prior to the most recent three months.

º (2)
º Reflects estimated potential changes in medical and other expenses payable, caused by changes in annualized claims trend used for the estimation of per member per month incurred claims for the most recent three months.