Capital Blue Cross and Subsidiaries - Page 5

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               Generally, each individual member of a group who purchased             
          insurance from petitioner could elect the type of insurance                 
          benefit and the type of insurance coverage that would be                    
          applicable.                                                                 
               We use the word “benefit” herein to distinguish between                
          insurance that was applicable to an individual only, to an                  
          individual as a parent with one or more dependents, or to an                
          individual as a parent with a spouse and children (family).                 
               We use the word “coverage” herein to distinguish between the           
          different types of medical costs that, as of January 1, 1987,               
          were reimbursable by petitioner under the various group contracts           
          as follows.                                                                 
               Under basic medical, the costs of basic medical services               
          performed by “professional providers” (e.g., doctors, dentists,             
          optometrists, and physical therapists) were covered.                        
               Under basic hospital, the costs of basic hospital services             
          such as inpatient and outpatient services obtained in hospitals             
          or in surgical centers were covered.                                        
               Under major medical, major medical services not covered                
          under basic medical and basic hospital were covered.  Major                 
          medical also covered a portion of the costs of prescription                 
          drugs.                                                                      


               2(...continued)                                                        
          individual members of each group.                                           





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