Commonwealth Choice – Facilitator Model Patrick Holland Chief Financial Officer

2 Commonwealth Choice Alternate distribution channel for the purchase of unsubsidized healthcare –Competing with intermediaries & Carriers –Exclusive distribution channel for Young Adults [age inclusive] Standardized benefit designs within coverage tiers Range of affordable coverage options Select and offer high value health plans

3 Commonwealth Choice Seal of Approval (SoA) –Approval of BOD indicating that a health benefit plan meets certain standards regarding quality and value –Carriers with 5,000 or more members required to respond to Health Connector SoA –SoA process intended to encourage innovation from Carriers

4 Young Adults Small Business Voluntary PlansIndiv.& Families Leverage Existing Market

5 Evolving Business Model During recent SoA process, moving from non-standard to standardized benefit designs Continue to simplify the shopping experience through website enhancements Greater use of consumer-facing decision support tools Small group options

6 Goals of New Model Promote transparency and standardization Minimize disruption to existing members Align choice of benefit designs with consumer demand –Use of focus group results –Market survey data

7 Key Aspects of SoA Carriers must respond to all proposed benefit designs Continue to encourage “Select” or “Tiered” networks If awarded SoA, selected carriers are required to participate in all tiers and products

8 Key Aspects of SoA Benefit Designs –Based on research of Commonwealth Choice members and non-members, SoA reflects; Demand for choice of benefit designs and carriers Balanced with need to make shopping experience easier –Price transparency also rated high by consumers Influential on carrier price-point –Structure and refinement of most recent SoA reflects nearly two years of experience with exchange model

9 SoA Results Awarded SoA to all existing Carriers and approved a new market entrant Carriers agreed to modify benefit plans to comport to Health Connector plan designs Reduced number of benefit designs from 27 to 9 New model allows consumer choice, but streamlines benefit design options –Clearer and easier shopping experience for consumer –Consistent with market research