State Corporation Commission Bureau of Insurance Rate Presentations July 18, 2019

Health Care Coverage of the Virginia Population - 2018 Source: U.S. Census Bureau - Current Population Survey - Annual Social and Economic Supplements Definitions Medicaid: Includes those covered by Medicaid, the Children’s Health Insurance Program (CHIP), and those who have both Medicaid and another type of coverage, such as dual eligibles who are also covered by Medicare. Medicare: Includes those covered by Medicare, Medicare Advantage, and those who have Medicare and another type of non-Medicaid coverage where Medicare is the primary payer. Excludes those with Medicare Part A coverage only and those covered by Medicare and Medicaid (dual eligibles). Employer: Includes those covered by employer-sponsored coverage either through their own job or as a dependent in the same household. Other Public: Includes those covered under the military or Veterans Administration. Non-Group: Includes individuals and families that purchased or are covered as a dependent by non-group insurance. Uninsured: Includes those without health insurance and those who have coverage under the Indian Health Service only.

Enrollment in Self-Funded Plans and the Individual, Small Group, and Large Group Comprehensive Markets - 2018 Enrollment in the Fully-Insured Market – Individual, Small Group, and Large Group Comprehensive - 2018 Source: Company reported data found in the Annual Report - Supplemental Health Care Exhibit.

Health Care Coverage of the Virginia Population Employer Non-Group Medicaid Medicare Other Public Uninsured 2018 53% 4% 12% 14% 7% 10% 2017 55% 5% 11% 9% 2016 2015 8% 2014 13% 6% 2013 57% 2012 2011 2010 2009 2008 59% Source: U.S. Census Bureau - Current Population Survey - Annual Social and Economic Supplements Definitions Medicaid: Includes those covered by Medicaid, the Children’s Health Insurance Program (CHIP), and those who have both Medicaid and another type of coverage, such as dual eligibles who are also covered by Medicare. Medicare: Includes those covered by Medicare, Medicare Advantage, and those who have Medicare and another type of non-Medicaid coverage where Medicare is the primary payer. Excludes those with Medicare Part A coverage only and those covered by Medicare and Medicaid (dual eligibles). Employer: Includes those covered by employer-sponsored coverage either through their own job or as a dependent in the same household. Other Public: Includes those covered under the military or Veterans Administration. Non-Group: Includes individuals and families that purchased or are covered as a dependent by non-group insurance. Uninsured: Includes those without health insurance and those who have coverage under the Indian Health Service only.

Number of Carriers in the Individual Market On and Off Exchange

Individual Market Share – by 2020 Projected Covered Lives

Number of Carriers in the Small Group Market On and Off Exchange

Small Group Market Share – by 2020 Projected Covered Lives

Individual and Small Group On and Off Exchange Total Enrollment 2014 - 2020 Source: Annual Supplemental Health Care Report – Number of covered lives by market for 2014-2018. 2019 and 2020 data derived from the 2020 rate filings.

Individual On and Off Exchange Total Enrollment and Total Weighted Average Premium 2014 - 2020

Estimated Distribution of the On-Exchange Individual Market Enrollment by Federal Poverty Level Source: Carrier data call and Marketplace Open Enrollment Period Public Use files. Virginia – Individual Market Summary and Modeling Results – January 4, 2019. Oliver Wyman. Funds for the study provided to the State Corporation Commission by the Federal Market Stabilization Grant.

Effects on Individual Market Rates due to Medicaid Expansion Medicaid expansion estimated impact on the individual market rates ranged from 0% to -2.3% Actuarial study estimated 44,300-70,400 will move from Individual Market to Medicaid over the next one to three years. Transition – agencies worked together

Estimated Impact of New Coverage Options on Projected Individual Market Enrollees Source: Carrier data call and Marketplace Open Enrollment Period Public Use files. Virginia – Individual Market Summary and Modeling Results – January 4, 2019. Oliver Wyman. Funds for the study provided to the State Corporation Commission by the Federal Market Stabilization Grant.

General Approach to Rate Reviews Initial rate submissions were due May 24; the Bureau’s deadline to submit QHP recommendations is August 21 (non-QHP reviews are completed by this date as well) SERFF public access suspended for any individual and small group market form, rate, and binder revisions made on or after May 31 Deadline of July 10th for carriers to submit voluntary service area revisions and voluntary rate filing revisions. Plans may be withdrawn following this date if such withdrawal does not cause a change in service area. SERFF public access will be fully enabled following this date. Bureau staff review the contents of each rate filing for completeness, accuracy and compliance with Federal and state filing requirements Companies are requested to make any necessary changes before the filing is sent to the consulting actuaries for their review

Virginia Rate Filing Template Introduced for 2019 ACA rate filings Standardized format for carrier experience data, projections, source of rate changes, etc. New template includes some prior required exhibits Consistent with URRT definitions Summary tools allow for state-wide analysis of ACA markets, including any outliers, in addition to changes from 2019 approved rates

2020 Pricing Challenges Population morbidity Carrier entrances/exits Member movement High cost claimants Medical and drug trend

2020 ACA Pricing Trends Individual Small Group INPATIENT OUTPATIENT   INPATIENT OUTPATIENT PHYSICIAN Rx Carrier Cost Util Total TOTAL Cigna 3.0% 1.8% 4.9% 3.6% 4.5% 0.7% 5.2% HealthKeepers 7.0% 10.0% 6.0% 3.2% 9.4% 2.7% 6.4% 8.0% 2.5% 10.7% 8.9% Kaiser 3.5% 2.0% 5.6% 1.0% 2.1% 3.1% 2.3% 4.3% 4.8% Optima HP 7.6% 8.7% 7.4% 8.5% 5.4% 6.5% 8.6% 0.1% 7.5% Small Group CareFirst -2.0% 4.0% 1.9% 5.0% 8.1% 6.1% 7.7% Anthem/HK 2.4% 7.1% 1.5% 7.3% United 3.7% 7.8%

ACA Loss Ratio Experience

Percentage increase of weighted average premium – individual market from 2014 to 2020: 96%.

Percentage increase of weighted average premium – small group market from 2014 to 2020: 35.4%.

Presenting Companies HealthKeepers, Inc. (Ind/SG) /Anthem Health Plans of Virginia, Inc. (SG only) Cigna Health and Life Insurance Company (Ind only) Optima Health Plan (Ind/SG) Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc. (Ind/SG) UnitedHealthcare Insurance Company (SG only) CareFirst BlueChoice, Inc./Group Hospitalization and Medical Services, Inc (SG only)