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 Response Letter

June 21, 2005

     Mr. Daniel F. Duchovny
Office of Mergers and Acquisitions
Division of Corporation
          Finance
U.S. Securities and Exchange Commission
Washington, D.C. 20549

Re:
USHEALTH Group, Inc.

Form 10-K for fiscal year ended December 31, 2004
Filed March 9, 2005
File No. 0-10873

Dear Mr. Duchovny:

I am responding to the specific
comments of the staff (the “Staff”) of the Securities and Exchange Commission
(the “Commission”) raised in your letter of May 5, 2005, addressed to Patrick H.
O’Neill, Esq., with respect to the Form 10-K for the fiscal year ended December 31,
2004 of USHEALTH Group, Inc. (the “Company”) filed with the Commission on March
9, 2005. I am responding to the Staff’s comments numbered 27 to 29. I have been
informed that counsel for Special Situations Holdings, Inc. – Westbridge
(“SSH”) will respond to the Staff’s comments numbered 1 to 26. SSH
currently owns 93% of the Company’s common stock.

The Staff’s comments numbered 27
to 29 are set forth in their entirety in italicized type in this letter. The responses of
the Company immediately follow each of the Staff’s comments and/or are set forth in
Amendment No. 1 to the Company’s Form 10-K for the fiscal year ended December 31,
2004 (“Amendment No. 1”), filed today with the Commission.

Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Investments

               27.

               It appears you had unrealized losses as of December 31, 2004 and 2003 that
               may be material when compared to your results of  operations. As such,
               please revise your management’s discussion and analysis to provide the
               following disclosures:

               a.

               Disclose the carrying value of non-traded securities and describe the
               methodology used to estimate their fair value,  including material
               assumptions made and factors considered.

               b.

               Identify the amount of unrecognized impairment loss (i.e. unrealized loss) at
               December 31, 2004 by investment category and  describe the key
               assumptions made and factors considered in reaching the conclusion that the
               decline below cost  is not other-than-temporary.

               c.

               Disclose the following as it relates to the securities with an unrealized
               loss:

               i.

               Describe the risks and uncertainties inherent in the assessment methodology,
               including the impact on future earnings and  financial position should
               management later conclude that the decline is other-than-temporary;

               ii.

               Consider providing a separate table that separately discloses at a minimum a)
               investment grade fixed maturity securities, b)  non-investment grade
               fixed maturity securities and c) equity securities. For each class of
               securities, depict the length of time the securities have continuously been
               in an unrealized loss  position showing the carrying value and the dollar
               amount of the unrealized losses using separate  aging categories (e.g.
               less than six months, six month to 12 months, over 12 months to 24 months,
               over 24 months to 36 months etc…). If meaningful in your circumstances,
               consider providing  further categorization for each of the preceding
               aging categories depicting how much “under water”  the
               unrealized loss is by showing separate categories of unrealized losses as a
               percentage of  carrying value (e.g. less than 20%, 20% to 50%, greater
               than 50%), while still showing the dollar  amount of carrying value and
               unrealized loss for each further category;

               iii.

               Disclose any concentrations in the types of securities or industries that
               exist;

               iv.

               Disclose the percentage of the fair value of securities and unrealized loss
               that are non-investment grade and securities  that are not rated;

               v.

               For fixed maturity securities, disclose in tabular or narrative form the
               maturity dates;

               vi.

               Identify the type, carrying value and unrealized loss
               of individual material underwater securities;

               vii.

               For any securities
               that you sold during the year at a loss, disclose:

               (1)

               The amount of the loss recorded and the fair value at the sales date;

               (2)

               Facts and circumstances giving rise to the loss and the sale,

               (3)

               The period of time that the security had been continuously in an unrealized
               loss position; and

               (4)

               Why that sale does not contradict your assertion regarding your ability and
               intent to hold securities with unrealized losses  until they mature or
               recover in value, if and as applicable.

Response to Comment No. 27

The
Company has amended its Form 10-K, Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations to address the investment disclosures
recommended in Items a., b., c.i., c.ii., c.iii., c.iv., c.v. and c.vii. The Company
elected to group the unrealized loss disclosure by type of fixed maturity security as no
one individual “underwater” security had a market value below 93% of book value
and therefore did not identify individual securities in unrealized loss positions (Item
c.vi.) as none were material.

Contractual Obligations

          28.

          We note the company did not include its policy liabilities and accruals in
          the contractual obligation table; it would appear  that these liabilities
          represent future legal obligations of the company. Due to the significant nature
          of these liabilities  to the company’s business we believe their
          inclusion in the contractual obligation table will provide investors increased
           disclosure of liquidity. The purpose of Financial Reporting Release 67
          is to obtain enhanced disclosure concerning a  registrant’s
          contractual payment obligations and the exclusion of ordinary course items would
          be inconsistent with the  objective and the Item 303(a)(5) of Regulation
          S-K. Based on the above factors, please revise the contractual obligation
          table  to include policy liabilities and accruals. In addition please
          consider including a discussion to address the impact of these  factors
          on the company’s liquidity.

Response to Comment No. 28

The
Company has amended its Form 10-K, Contractual Obligations table to include its future
policy benefits and claim liabilities. It should be noted that the payments related to
future policy benefits and claim liabilities have been projected utilizing assumptions
based upon the Company’s historical experience and anticipated future experience.
Significant uncertainties relating to these liabilities include morbidity, mortality,
persistency, expenses, inflation, contract terms and the timing of payments. The
determinations of these liability amounts are based upon estimates and the timing of
payments are not always reasonably fixed and determinable. As such, the amounts of the
payments and the timing of such payments may actually differ from those presented in the
amended table.

Item 8. Financial
Statements and Supplementary Data

Note 12 – Special
Executive Compensation and Severance

          29.

          Please tell us why the $2 million liability was recorded related to Mr.
          Cutler’s employment agreement. In doing so, please  cite the
          specific accounting literature (by pronouncement and paragraph) and the specific
          terms of the agreement that support  the recognition of the liability.
          Based on your disclosures about the agreement in Item 11, the $2 million would
          appear to  represent a one-time liquidation sharing amount, in the event
          of the consummation of either (a) a Qualifying Liquidation Event  or (b)
          any pay down of the CSFB debt. However, we did not note the occurrence of any of
          these events. In addition, based on  the disclosures in Note 5, the CSFB
          debt does not appear to mature until March 2010. As such, it is unclear why the
          liability  was established in 2004.

Response to Comment No. 29

The
$2 million liability related to Mr. Cutler’s employment agreement was recorded in
2004 because the liquidation sharing amount of $2 million is certain in amount based upon
a definitive obligation and therefore was incurred at the date the employment agreement
was executed. The amount is payable to Mr. Cutler when the CSFB debt is paid down and is
payable regardless of whether or not Mr. Cutler is employed when that event occurs.
Therefore, it is a determinable amount and is probable of occurrence.

Under
FASB Concepts Statements No. 6, Paragraph 35, liabilities are defined as,
“…probable future sacrifices of economic benefits arising from present
obligations of a particular entity to transfer assets or provide services to other
entities in the future as a result of past transactions or events.” Furthermore,
Paragraph 36 states, “A liability has three essential characteristics: (a) it
embodies a present duty or responsibility to one or more other entities that entails
settlement by probable future transfer or use of assets at a specified or determinable
date, on occurrence of a specified event, or on demand, (b) the duty or responsibility
obligates a particular entity, leaving it little or no discretion to avoid the future
sacrifice, and (c) the transaction or other event obligating the entity has already
happened.”

At
the date of Mr. Cutler’s employment agreement, the Company’s obligation was
fixed and determinable derived from a probable event, the pay down / retirement /
restructuring of the CSFB debt. The financial statements of the Company are prepared on a
“going concern” basis and presume the retirement of contractual obligations in
the ordinary course of business. Accordingly, it is highly probable that the Company will
pay down, retire or refinance the CSFB debt on or before the stated maturity date of March
24, 2010. With the initiation of Mr. Cutler’s employment (the event obligating the
Company), the Company incurred a present responsibility that would be settled on
occurrence of a specified event (pay down, retirement or restructuring of CSFB debt). Per
the terms of Mr. Cutler’s employment agreement, the payment is not contingent upon
continued employment by Mr. Cutler or performance targets to be attained by the Company.
This liability is akin to an initial employment bonus that will be paid in the future.

I would appreciate receiving any
comments you may have concerning the foregoing responses and Amendment No. 1 at your
earliest convenience. I would also like to request a conference call to discuss any
further comments you may have. If you have any questions, please contact the undersigned
at (817) 878-3732.

Sincerely,

USHEALTH Group, Inc.

/s/ Cynthia B. Koenig
Cynthia B. Koenig

Senior Vice President and
Chief Financial Officer

cc:
Mr. Benjamin M. Cutler

      Patrick H. O'Neill, Esq.

      Robert S. Reder, Esq.

      Mr. Alan Freudenstein

     Mr. Gregory Grimaldi

  William B. Hobbs, Esq.