Castlight Update George Lenko Program Director – National Initiatives Anthem BCBS Nita Sommers VP Business Development Castlight Health This session is billed as an update, but I’m pleased to say that this is more of an announcement. Over the past year, working together on 3rd Party Transparency, Anthem and Castlight have grown to understand each others’ strengths and, today, Anthem is announcing our partnership with Castlight to deliver an advanced benefit design, specifically Reference Based Benefits. (introduce Nita) Anthem believes that, by linking our Blue network advantage to state-of-art information technology, we can preserve enrollee choice & access while saving benefit costs through reference based benefit (RBB) designs.

Anthem’s Hip/Knee RBB Results Anthem analysis of the RBB pilot revealed: The number of surgeries performed at facilities that charge below the benefit threshold was 8% higher once the program was in place. $35,000.00 $30,000.00 $25,000.00 $20,000.00 $15,000.00 $10,000.00 $5,000.00 $0.00 Average cost per surgery Pilot Period Benchmark Period The average paid amount per surgery was 30% lower during the pilot than it was the prior year. This is a combination of the members going to lower cost facilities more often, as well as the cap being applied to members who chose to use facilities that charged in excess of the threshold. 8% higher REFERENCE BASED BENEFITS: Having transparency information enables us to develop advanced benefit models. We’ve had great success with our pioneering work on Reference Based Benefits….For CalPERS, we saw an 8% redirection to lower cost sites for knee & hip replacements and, better still a 30% drop in cost per service compared to the prior year. Our message to the market has been…. Pilots have demonstrated success Program is available nationally, based on national Blue transparency data Plans in the works to enhance considerably for Jan 2014 30% lower

Why RBB? Anthem found tangible advantages from our transparency efforts. Unfortunately, most enrollees don’t access the information. Coupling transparency information to benefit design heightens the shopping experience RBB has advantages over restrictive benefit design; it applies only to services where shopping is possible and it preserves choice…we can leverage our broad networks . For 2014, Anthem is ‘doubling-down’ on RBB. Anthem has found tangible advantages from our Consumer Engagement and transparency efforts. Beyond helping patients choose better care, our efforts to expose differences in cost, quality, and patient experience have changed competitive dynamics among health care providers. Furthermore, enrollees using our information have been increasingly satisfied by finding useful information for many conditions. Unfortunately, most enrollees don’t access the transparency information. Or, even when presented with cost & quality differences, they haven’t considered seeking care from alternate sites….especially where there is negligible out-of-pocket advantage in doing so. To encourage engagement and to make the choices more meaningful, Anthem has found that coupling the transparency content to benefit design heightens the shopping experience. “Reference Based Benefits” is an advanced plan design which sets benefit limits on certain commonly available services with highly variable costs. The limits are set based on the distribution of providers’ contracted rates, and they’re sensitive to the employer’s quality and access objectives. Patients who seek care from providers costing more than the reference threshold are responsible for the excess costs. RBB has advantages over restrictive network designs because it applies only to services where shopping is possible, and since enrollees can continue to use the broad network for impacted services and, of course, for all other medical services.

Why partner with Castlight? A market-leading RBB capability requires high enrollee engagement, state-of-art navigation, and ability to adjudicate advanced benefit designs Castlight did pioneering work in RBB, focusing especially on engagement & navigation. They are regarded by many as the market leader in the medical shopping experience. By integrating Castlight’s capabilities and Anthem’s networks & servicing, we can offer a market-leading RBB plan design. . A market-leading RBB capability requires high enrollee engagement, state-of-art navigation, and ability to adjudicate advanced benefit designs. Anthem pioneered RBB adjudication with several high-profile clients for knee/hip replacements and for advanced imaging. The results have been stunning. Our Vendor also did pioneering work in reference based benefits, focusing especially on engagement and state-of-art navigation. They are regarded by many as the market leader in the medical shopping experience. By bringing the Vendor’s engagement & navigation capabilities and Anthem’s networks & servicing capabilities into one integrated experience, we can offer a market-leading RBB plan design.

The Value to Clients Anthem’s RBB model will appeal to employers who want Superior network value (broadest network, best rates) Superior servicing Higher employee engagement Market leading medical shopping experience Direct savings from RBB thresholds, either by redirecting services or by imposing the limits. Savings will depend on factors within the control of the employer, including the number of services impacted by RBB and where the RBB threshold is set for those services. Savings will grow as more services are impacted by RBB.

(PLACEHOLDER SLIDE) Cue up the JellyVision teaser video Transition to Nita after video

Who Is Castlight Health? 25% 7 #57 PhDs in advanced math and sciences full-time physicians CEO ranked in top 100 most creative business execs 90 $181 #1 Product-focused employees million in capital WSJ VC-backed company Our roots

RBB: How It Works Wide price variation exists within a region Price for Neck MRI $575 $575 $647 $647 $705 $705 $840 $840 $926 $926 $1000 $1000 $1360 $1360 $1510 $1510 $1671 $1671 $2030 $2030 Define Reference Price If member chooses location below reference price If member chooses location above reference price Normal coverage rules apply Member pays portion above reference price

Member goes to Central Hospital RBB: How It Works MRI of the Knee Coverage 20% coinsurance Reference price $500 Member goes to Central Hospital Total Price $650 Reference Price Overage $500 $150 Member Pays: $100 (20%) Employer Pays: $400 (80%) Member Pays: $150 Employer Total $400 Member Total $250

RBB Can Help You No Matter Where You Are In Your Benefits Journey, RBB Can Help You Achieve Your Goals Meet Anne, who leads benefits at a company that: Offers fairly rich benefits Wants to maintain benefits, but is struggling to do so as costs rise Meet Bob, who leads benefits at a company that: Has already shifted costs considerably Already has a culture of employee responsibility

Value of RBB Slows growth in trend, with less pushback from employees than limiting provider choices Keeps benefits the same for employees that stay under the reference price Begins to instill greater accountability with employees Enables further savings beyond what traditional high cost sharing plans can achieve Helps preserve benefits and prevent the need to drop coverage for employees Reinforces accountability and consumerism of employees

RBB Implementation Tailored To Needs Launch RBB on only a few services to start Set reference prices high to minimize change Heavy emphasis on education, teaching employees about the value of making better decisions Launch RBB on a broad set of services and categories Set reference prices low to drive behavior change quickly Heavy emphasis on change management, easing the transition to the new plan

Anthem And Castlight Make It Easy Comprehensive provider network RBB adjudication expertise and capabilities Rich data resources anthem.com integration Streamlined member support Best-in-class health care transparency solution In-depth expertise designing and implementing RBB programs Comprehensive communications and change management tools Market-leading engagement tactics and results

What To Do If You’re Interested Contact Your Anthem or Castlight representative today!