Washington State Hospital Association Health Information Program The following slides illustrate key findings from 2004 for Washington health plans. The data are from annual statements filed with the Office of the Insurance Commissioner. For more information, contact Rachelle Tsunehara Profile of Washington Health Plans, May 2005

Washington State Hospital Association Health Information Program A Very Good Year For Health Plans All plans except one had positive underwriting margins. Aggregate underwriting margin was 4.5%. Plans made over $370 million on health insurance operations. Plans had nearly $540 million in net income.

Washington State Hospital Association Health Information Program In aggregate, claims expenses were only 82.6% of premiums. Annual premiums (based on 12 member months) increased by 8.6% between 2003 and Plans based primarily in Washington have 2.7 months of premium in reserve. Other Indicators Show Plans’ Financial Success

Washington State Hospital Association Health Information Program Premiums: In 2004, Premera, Regence, Group Health and their subsidiaries represent 76% of total premiums. Premera Blue Cross – 23% LifeWise Health Plan – 1% Regence BlueShield – 20% Asuris Northwest Health – 1% RegenceCare – 1% Regence Oregon Plans – 1% Group Health Cooperative – 24% Group Health Options – 4% Kaiser Foundation Health Plan – 4% Community Health Plan of Washington – 5% PacifiCare of Washington – 7% Molina Healthcare of Washington – 6% Other Plans – 3% (Premera) (Regence)

Washington State Hospital Association Health Information Program Year-End Enrollment in Selected Plans: In 2004, Premera, Regence, Group Health and their subsidiaries account for 75% of enrollment. Thousands

Washington State Hospital Association Health Information Program Enrollment Compared to Washington Population: Year-end enrollment in insured plans dropped again while population increased. Note: Does not include enrollment in self insured plans; that data not available from OIC plan filings.

Washington State Hospital Association Health Information Program Claims Expense Compared to Premiums: Premiums continue to be high compared to claims expenses. Percent of premiums used for claims Reasonable Ratio = 85%

Washington State Hospital Association Health Information Program Administrative Expenses: Administrative expenses have increased steadily since 1998.

Washington State Hospital Association Health Information Program Administrative Expense Ratio: Administrative expense as a percent of premiums remains stable.

Washington State Hospital Association Health Information Program Underwriting Margins in Selected Plans: All but one plan had a positive underwriting margin in 2004.

Washington State Hospital Association Health Information Program Annual Premiums for Selected Plans: Average premium varies considerably, due to benefit designs and enrollee demographics.

Washington State Hospital Association Health Information Program Note: Includes health plans based primarily in Washington only. Net Income Per Member Per Month: The more enrollees in a plan, the better it’s financial position.

Washington State Hospital Association Health Information Program Health plans should have approximately two months of premium in reserves to be financially secure. Months of Premium in Reserve: Note: Includes health plans based primarily in Washington only.  Average