1 National Health Access Citizens Health Care Working Group National Health Access Citizens Health Care Working Group May 12, 2005 Presented by: Kenneth L. Sperling CIGNA HealthCare Presented by: Kenneth L. Sperling CIGNA HealthCare

2 BackgroundBackground The HR Policy Association Represents the senior HR leadership of Fortune 500 companies Over 240 member companies; cross-section of American industry Entry into health care at 2003 annual meeting; formed Health Care Policy Roundtable Identified the uninsured as principal focus The HR Policy Association Represents the senior HR leadership of Fortune 500 companies Over 240 member companies; cross-section of American industry Entry into health care at 2003 annual meeting; formed Health Care Policy Roundtable Identified the uninsured as principal focus

3 Health Care Policy Roundtable J. Randall MacDonald IBM Corporation, Chairman, Health Care Policy Roundtable Timothy Hughes Cox Enterprises, Inc., Chairman, Public Policy Directions Greg Lee Sears Roebuck & Co., Chairman, Affordable Health Care Solutions Coalition John Butler Textron Inc., Chairman, Regional Health Care Quality Reform Initiatives Sid Banwart Caterpillar, Inc., Chairman, Direct Pharmaceutical Purchasing Coalition J. Randall MacDonald IBM Corporation, Chairman, Health Care Policy Roundtable Timothy Hughes Cox Enterprises, Inc., Chairman, Public Policy Directions Greg Lee Sears Roebuck & Co., Chairman, Affordable Health Care Solutions Coalition John Butler Textron Inc., Chairman, Regional Health Care Quality Reform Initiatives Sid Banwart Caterpillar, Inc., Chairman, Direct Pharmaceutical Purchasing Coalition

4 Charter Coalition Members Initial population – 1.3 million Employees, independent contractors, pre-65 retirees 3 million including dependents Initial population – 1.3 million Employees, independent contractors, pre-65 retirees 3 million including dependents ACS ALCOA Aerojet Allstate Insurance Company Amerada Hess Anheuser-Busch Avon Caterpillar Inc. Circuit City Stores, Inc. Cox Enterprises, Inc. DTE Energy Company Eaton Corporation Edward D. Jones & Company, LP EMC Corporation Emerson Electric Company Episcopal Church Medical Trust Federal-Mogul Corporation FedEx Ground First Data Corporation Ford Motor Corporation FPL Group Inc. Gap, Inc. General Dynamics General Electric Company General Mills General Motors Hilton Hotels Honeywell The Home Depot IBM Corporation Intel International Paper Johnson Controls, Inc. Kelly Services, Inc. Limited Brands Lockheed Martin Corporation Maersk Manpower Incorporated Marathon Ashland Petroleum Marathon Oil Corporation Marriott McDonald's Corporation Motorola, Incorporated Parker Hannifin Corporation Payless ShoeSource, Inc. Pitney Bowes Prudential Financial Sears Roebuck & Company Sprint Standard Parking Starbucks Corporation Starwood Hotels & Resorts SYSCO Target Textron Inc. Toys "R" Us, Inc. United Parcel Service United Technologies Verizon Communications Verizon Wireless

5 Affordable Health Care Solutions Coalition Concept Address the issue of the “working uninsured” by aggregating large groups of employees not receiving a health care benefit subsidy from a broad cross-section of American industry Create more viable individual health care market Promote dissemination of provider efficiency and effectiveness data Focus on uninsured populations in large corporations, specifically— Full-time, part-time, temps without coverage Contract workers, independent agents, consultants Pre-Medicare retirees Concept Address the issue of the “working uninsured” by aggregating large groups of employees not receiving a health care benefit subsidy from a broad cross-section of American industry Create more viable individual health care market Promote dissemination of provider efficiency and effectiveness data Focus on uninsured populations in large corporations, specifically— Full-time, part-time, temps without coverage Contract workers, independent agents, consultants Pre-Medicare retirees

6 Affordable Health Care Solutions Coalition Goals Fully insured No required direct employer subsidy Guaranteed issue (i.e., no medical questions or underwriting) National solution Range of options and price points significantly better than current individual health insurance market, including comprehensive major medical coverage Provider cost and quality transparency Goals Fully insured No required direct employer subsidy Guaranteed issue (i.e., no medical questions or underwriting) National solution Range of options and price points significantly better than current individual health insurance market, including comprehensive major medical coverage Provider cost and quality transparency

7 National Health Access Offering for Fall Depending on location, individual products may be offered that do include individual underwriting Level I Guarantee Issue (with waiting periods) Guaranteed Issue (no waiting periods) Level III Level II Level IV Level V Level VI Discounted Network Major Medical—$2,000 Deductible (HSA) 1 Major Medical—$1,100 Deductible (HSA) 1 Wellness Benefit Scheduled Inpatient & Outpatient Benefits Scheduled Outpatient Benefit

8 Current configuration leads to Major Medical options in 32 states representing 87% of the eligible population States with Major Medical Offerings

9 ChallengesChallenges Adverse selection concerns on major medical coverage led to a fragmented state-by-state solution Could not cover franchisees or small employers Need to build front-end infrastructure for eligibility, enrollment, billing, and service Lack of industry consensus on provider quality measurement and reporting Adverse selection concerns on major medical coverage led to a fragmented state-by-state solution Could not cover franchisees or small employers Need to build front-end infrastructure for eligibility, enrollment, billing, and service Lack of industry consensus on provider quality measurement and reporting