Chairman's letter2010411215013

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					   3 October 2008

Chairman’s letter

                                                                            Your Initial Entitlement is:

                                                                            Your Member Registration Number (MRN)

   Dear Mrs Smith
   Further to my recent letter, it is my pleasure to provide you with your Information Memorandum which contains
   details of the $367 million Proposal for ahm to demutualise and merge with Medibank.
   As I mentioned in my last letter to you, the ahm Board has determined that the demutualisation and merger
   Proposal is in the best interests of ahm’s Members, and unanimously recommends that Members vote in favour
   of each of the Resolutions to implement the Proposal, subject to a superior proposal. Reasons for the Board’s
   recommendation are set out in the accompanying Information Memorandum.
   If the Proposal is implemented, Participating Members will receive a cash payment recognising their type,
   scale and duration of policy (your Initial Entitlement is shown above). It is Medibank’s current intention that if
   the Proposal is implemented:
   ●   Members’ existing policies and benefits will continue;
   ●   Members’ access to the Dental and Eyecare Practices, as well as access to Total Health, will be
       maintained; and
   ●   the ahm brand will be retained and remain a separate brand to Medibank.
   Importantly, it is also Medibank’s view that if the Proposal is implemented, because of expected cost
   advantages for ahm’s health purchasing and other synergies, Members will experience lower pressure on
   annual premium increases than if ahm remained a stand alone business. For more information on Medibank’s
   current intentions and views, and the stated qualifications to Medibank’s intentions, please see Section 9
   (pages 37-39) of the Information Memorandum accompanying this letter.
   This is an exciting opportunity for ahm and its Members to benefit from the scale that will come from ahm
   merging with one of Australia’s largest private health insurers. Your Board supports the Proposal and we
   believe our Members are best served by ahm merging with Medibank.
   I strongly encourage you to read the Information Memorandum carefully and to vote on the Resolutions to
   implement the Proposal by completing and returning the enclosed voting forms or by voting online at Clear instructions on how to vote are detailed on the following pages.
   I encourage you to exercise your right to vote because your vote is important. The Proposal cannot proceed
   without Member approval.
   If you have any questions on the Proposal or on how to vote, please visit our website at or
   call the demutualisation hotline on 1300 VOTING (1300 868 464).
   Yours sincerely,

   Christopher M Doogan, AM

              Australian Health Management Group Limited. ABN 96 003 683 298. A Private Health Insurer

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