Exhibit 2

          [Letterhead of Attorney General of Missouri]



                         April 20, 1998




Via Facsimile and Overnight Delivery

John Riffle, Esq.,
  Lewis, Rice & Fingersh, L.C.,
    500 N. Broadway, Suite 2000,
      St. Louis, Missouri 63102.

Re:  Blue Cross and Blue Shield of Missouri

     Dear Mr. Riffle:

          You have asked the State formally to propose terms that
would resolve the many outstanding legal and regulatory disputes
involving Blue Cross and Blue Shield (BCBS).  Attached is our
proposal.  It is our understanding that this proposal will be
presented to the Boards of Directors of BCBS and RightCHOICE
Managed Care, Inc. on Tuesday, April 21, 1998.

          Please understand that, given the breadth and
complexity of the issues involved, the purpose of the attached
proposal is not to serve as an offer of a binding contract.
Rather, the attachment articulates a framework within which the
Department and the Attorney General are willing to commit to
resolving all pending disputes.  Because the framework itself
resolves most of the pending legal and regulatory claims, we
believe that an agreement faithful to those terms can be worked
out and we are willing to commit whatever resources are necessary
to doing so.

          Thank  you  for you consideration and  we  await  your
response.

                           Sincerely,



/s/ Jeremiah W. (Jay) Nixon                   /s/ Jay B. Angoff

Jeremiah W. (Jay) Nixon                       Jay B. Angoff, Director
Attorney  General                             Missouri Department of Insurance

 
                BLUE CROSS BLUE SHIELD LITIGATION
                    PROPOSED RESOLUTION TERMS
                         APRIL 20, 1998

A.   Blue Cross and Blue Shield ("BCBS") and RightCHOICE ("RC")
     will engage in a transaction or series of transactions the
     result of which will be:

  1. a single Missouri for-profit general business corporation
     ("NewBCBS") which would own all of the assets and assume all
     of the liabilities of BCBS and RC, excluding certain
     liabilities specifically reserved and the shares of RC that
     are presently owned by BCBS, and

  2. a new, Missouri non-profit, public benefit foundation
     ("NewFo") which would own all of the stock in RC presently
     owned by BCBS.

  3. NewBCBS would become the direct licensee for the Blue Cross
     and Blue Shield names and marks.

  4. it will be important for NewFo to have sufficient cash on
     hand on or about the date of the close of the transaction to
     cover organization and start-up expenses, including any
     taxes owed by the resulting foundation as a result of the
     transactions and any cash necessary to resolve any of the
     claims described below.

  5. As a general principle, the more cash the foundation has,
     the less the foundation will need to be concerned with the
     immediate effects of the resale restrictions, divestiture
     plan and voting trust referred to below.

  6. Similarly, the parties acknowledge that following the close
     of the transactions, NewBCBS must have sufficient cash or
     access to cash to conduct its regular business operations
     and meet regulatory reserve requirements.

B. NewFo would have the following characteristics:

  1. it would be a Ch.355, public benefit corporation

  2. it would NOT be a Ch.354 H.S.C. (or an insurance company of
     any kind)

  3. it would have a new name with no relation to its history as
     a "Blue"

  4. a reference to having been "funded through the conversion of
     Blue Cross and Blue Shield of Missouri" may be required in
     NewFo's publications and other marketing materials

  5. it would have new, narrowly formulated health care related
     charitable purposes that demonstrate a clear break from
     BCBS's historic insurance underwriting purposes.  These
     purposes would permit NewFo to make health care available to
     qualified persons residing in the former BCBS service area,
     and may include subsidizing the costs of medically
     appropriate, experimental procedures as well as subsidizing
     the costs of treatment of catastrophic illnesses.  The
     organizational documents would provide that the purposes
     could not be amended for a period of 10 years from the date
     of the reformation described herein without a proper cy pres
     showing before a Missouri state court of competent
     jurisdiction.

  6. it is neither expected nor intended that NewFo will
     undertake, in furtherance of its new purposes, to purchase
     (or subsidize the purchase of) health benefit plans,
     insurance coverage, or other products or services sold by
     NewBCBS or its related entities or any other health
     insurance company

    a. The parties agree, however, that should NewFo determine that
       such is an appropriate use of its assets in furtherance of
       its purposes, NewFo's bylaws will provide that such products
       or services not only may be purchased from NewBCBS, but that
       NewFo's Board should grant preferential status to NewBCBS as
       a provider as long as NewFo owns 5% or more of the
       outstanding stock of NewBCBS

    b. It is agreed that for this period the preference shall take
       the form, with respect to any particular product or service
       for which NewFo seeks bids from potential providers, of
       giving NewBCBS the "last opportunity" to provide such
       products or services on the most favorable bona fide terms
       offered to NewFo by any other potential provider.

  7. it has a newly constituted Board of Directors:

    a. number of Directors to be negotiated, depending upon the
       number of present BCBS directors seeking a spot on NewFo's
       Board, but 9 members as a starting point

    b. a majority of NewFo's Board immediately upon reformation
       will not have previously served on the Board of BCBS or RC

    c. method of selecting new Directors, those not carrying over
       from present BCBS Board, to be settled during negotiation

    d. no Director or Officer of NewFo is permitted to be an
       Officer/Director of NewBCBS

    e. no NewFo Director is permitted to own stock in NewBCBS
       without subjecting that stock to a voting trust similar to
       the one that will apply to the NewFo's NewBCBS stock

    f. all members of NewFo Board must meet qualifications to be
       determined by the parties that are consistent with NewFo's
       new purposes

     *

 12. it commits all of its NewBCBS stock to a voting trust, and
     holds the stock subject to a divestiture plan

    a. the purpose of the voting trust is to ensure that NewFo has
       no voice over, or responsibility for, the operation and
       management of NewBCBS

    b. the purpose of the divestiture plan is to liquidate NewFo's
       holdings of NewBCBS stock as rapidly as is prudent,
       consistent with securities laws and regulations, and the
       rules and requirements of the Blue Cross and Blue Shield
       Association, consistent with a commitment to protect the
       value of the shares and the rights of the other
       shareholders, consistent with NewBCBS's objective to emerge
       from these transactions as a viable health insurer with the
       ability to access the capital markets in the future,
       consistent with the liquidity needs of NewFo, and consistent
       with the anti-takeover protections deemed prudent by the
       NewBCBS Board

    c. the parties acknowledge that, during the pendency of the
       divestiture plan, nearly all of NewFo's corpus will be
       vulnerable to changes in fortunes at NewBCBS and that NewFo
       will have no control over management of NewBCBS, but the
       parties further acknowledge that the NewBCBS Board will owe
       NewFo the same fiduciary duties that it owes all other
       NewBCBS shareholders and NewFo will have all of the other
       rights and protections afforded shareholders of for-profit
       corporations under Missouri law and, specifically, that no
       term of the voting trust or divestiture plan shall infringe
       upon the NewFo's right, nor relieve it nor its Directors of
       their duty in a proper case, to protect the value of the
       foundation by all such means available at law or equity.

    d. the divestiture plan would provide that NewBCBS would have
       the right of first refusal to purchase shares of NewBCBS
       stock before they are sold by NewFo as long as NewBCBS and
       its insurance subsidiaries continue to meet all regulatory
       solvency and surplus requirements after the purchase.

    e. NewBCBS would have the continuing option to purchase NewBCBS
       stock from NewFo at the market price, as long as NewBCBS and
       its insurances affiliates continue to meet all regulatory
       solvency and surplus requirements after the purchase

    f. BCBS is invited to make the initial proposal as to the exact
       terms of the voting trust and divestiture plan

----------------
* Approximately one page of material has been omitted pursuant to a request
for confidential treatment.  This material has been filed separtely.

    g. provided that this agreement may be terminated prior to the
       close of transactions described herein if any party to this
       agreement declares that the terms of the divestiture
       agreement affect the value of stock owned by NewFo to the
       extent that it will prevent NewFo from adequately carrying
       out the purposes set out in paragraph B.5 of this agreement

 13. that, should the AG or DOI seek reimbursement  for any
     expenses, including legal, accounting and other outside
     consulting and advisory services incurred by them in
     connection with the transactions described herein on their
     behalf or on behalf of NewFo, NewFo will be solely
     responsible for such payments.

 14. the transactions described herein would be accomplished to
     minimize income tax liability resulting therefrom.  The
     parties agree that alternative transaction structures will
     be considered in order to accomplish this goal within the
     general framework of this term sheet.

C.   It is understood by all parties that it is the intention of
     the directors of BCBS, in connection with these
     transactions, to fulfill all fiduciary duties imposed upon
     them by law.  Various interested parties, in pending
     litigation, have made conflicting claims about to whom those
     duties are owed and by whom they may be enforced.  These
     Proposed Resolution Terms will be effected only if there is
     a judicial determination, binding on all interested parties,
     that it is lawful for BCBS to organize as a Chapter 355
     public benefit corporation and enter into the other
     transactions contemplated herein, and that such a
     reorganization can be effected without any breach of duty by
     the directors of BCBS.  To secure such a determination, the
     parties would agree to take the following steps:
*

D.   It is understood that all parties intend for this resolution
     to address all outstanding issues between the State and
     BCBS/RC.  To that end,

  1. all issues in the "main litigation," including the related
     action for declaratory judgment regarding BCBS' status as
     public (or mutual) benefit corporation, would be resolved by
     the reorganization described above

  2. in addition to the "main litigation," all "market conduct"
     issues, including "co-pay," would be resolved finally and
     completely and that payment of damages, fines or other
     amounts, if any, will be the responsibility of NewFo, not
     NewBCBS.

  3. in addition to the "main litigation" and "market conduct"
     issues, all "premium tax" issues would be resolved as a part
     of this reorganization.

  4. all other liabilities, including litigation and other
     contingent liabilities, which arise or have arisen prior to
     the transactions described herein, unless specifically

----------------
* Approximately one page of material has been omitted pursuant to a request
for confidential treatment.  This material has been filed separately.

     identified and addressed in the transaction documents, will
     belong to NewBCBS, not NewFo.

  5. the final transaction documents will contain releases from
     the AG and DOI on behalf of themselves, their agencies and
     offices, and the state as a whole, releasing BCBS, RC,
     NewBCBS (and their affiliates), and all past and present
     directors, offers, agents, employees and independent
     contractors of BCBS, RC and NewBCBS (and their affiliates),
     from (i) all claims and liability arising out of or relating
     to the 1994 reorganization, (ii) all claims and liability
     arising out of or relating to the transactions described
     herein, and (iii) all claims and liability arising out of or
     relating to all other outstanding issues and disputes
     pending between the State and BCBS/RC described above and
     those described on the list to be prepared by the AG and DOI
     described in (b.) below, but excluding those described in
     (a.) below:

    a. no such release, however, will, or will purport to, relieve
       any individual or entity from complaints lodged by consumers
       with the DOI, or any criminal liability of any kind, nor any
       liability from or on account of any conduct which is finally
       adjudged to have been knowingly fraudulent, deliberately
       dishonest or willful misconduct

    b. because it is the parties' intention that the transactions
       described herein will resolve to the fullest extent possible
       the entire panoply of issues that has arisen between the
       parties, the AG and DOI will represent that, except as
       described on a list to be prepared by the AG and DOI, there
       are no claims, disputes, investigations, audits or
       complaints pending against BCBS, RC or any of their
       affiliates, nor to the knowledge of the AG and DOI is there
       nay basis for such claims, disputes, investigations, audits
       or complaints.