August 1, 1997

          Via Facsimile

          [TITLE] <FirstName> <LastName>
          <Company>
          <Address>
          [CITY], [STATE] <PostalCode>

          Dear [TITLE] <Last Name>:

          As chairman of the Compensation and Stock Option
          Committee (the Committee) of the Foundation Health
          Systems, Inc. (FHS) Board of Directors, I wanted to
          communicate directly with you on several issues raised by
          the Proxy Statement for the FHS Stockholders' Meeting
          scheduled for August 6, 1997.

          As we have sought your votes in favor of the seven
          proposals contained in the proxy, we have heard concerns
          expressed by many of you with regard to Proposal 2 - the
          1997 Stock Option Plan (the Plan) for management.

          The Committee takes your concerns very seriously.  We
          want to address these concerns directly so that we may
          secure your support for this important program.  The
          Committee believes that stock options are the most
          efficient way to tie management incentives to stockholder
          interests.  This Plan is important to the future success
          of FHS, providing a critical link between management and
          stockholders.

          Let me now address the specific concerns we have heard.

          On behalf of the Committee, which will administer the
          Plan and is composed entirely of independent outside
          directors, I can commit to you that we will grant no more
          than 150,000 restricted stock awards, or 1.5 percent of
          the total shares in the Plan, during the duration of the
          Plan.  Any such grants will generally vest in equal
          annual increments over a period of not less than three
          years.  In addition, appropriate attention will be paid
          to total compensation in consideration of the value of
          such direct grants.  Proposal 2 did not specify the
          number of shares that the Committee intends to use for
          restricted stock grants or vesting periods.

          Any and all stock options granted under the Plan will
          also generally vest in equal annual increments over a
          period of not less than three years and will be granted
          at prices equal to or higher than the market price on the
          date of the grant.  Proposal 2 did not specify vesting
          periods for stock options.

          The Committee has no intention of repricing stock
          options.  Proposal 2 did not address the issue of
          repricing.

          Further, we will seek stockholder approval for certain
          material amendments to the Plan as provided for in the
          Plan.

          The FHS Board is committed to increasing stockholder
          value.  We are determined to address your concerns and
          administer this Plan in a way that provides appropriate
          incentives to management while being sensitive to the
          interests of all stockholders.

          If you have already voted in favor of Proposal 2, we
          trust this letter provides additional support for your
          decision.  If you have already voted against Proposal 2,
          we respectfully ask that you reconsider your vote given
          the above reassurances.  Finally, if you have not voted,
          we ask for your support, with the commitment of the
          Committee to adhere to the principles noted above.

          If you have other questions or concerns, please contact
          our vice president of Investor Relations, David Olson, at
          (818) 719-6978.

          Thank you for your consideration of these matters.

          Sincerely,

          J. Thomas Bouchard
          Chairman, Compensation and
          Stock Option Committee