1 Karen Benson, Healthcare Network Program Manager, SHBP State Health Benefit Plan Update Presentation to HomeTown Health, LLC Department of Community Health December 17,

2 ACCESS Access to affordable, quality health care in our communities RESPONSIBLE Responsible health planning and use of health care resources HEALTHY Healthy behaviors and improved health outcomes DCH Mission

3 FY 2008 FY 2009 DCH Initiatives FY 2008 and FY 2009 Medicaid Transformation Health Care Consumerism Financial & Program Integrity Health Improvement Solutions for the Uninsured Workforce Development PeachCare for Kids TM Program Stability Customer Service Medicaid Transformation Health Care Consumerism Financial Integrity Health Improvement Solutions for the Uninsured Medicaid Program Integrity Workforce Development PeachCare for Kids TM Program Stability SHBP Evolution Customer Service and Communication

4 SHBP Mission Execute a five year health care strategy with consumer driven health care and consumerism as a key part of the strategy Key Objectives Promote consumerism Streamline administration by consolidating options and vendors Maintain provider access and member choice Meet financial target Opportunity for long term success

5 High Level Strategy (2009 – 2013) Streamline options to offer two statewide health plan vendors, each offering four choices for active employees: –HRA (CDH Plan) –HDHP (CDH Plan) –PPO –HMO –Medicare Advantage Plan (for Medicare eligible retirees) Develop plan designs and incentives that promote consumerism and encourage members to engage in healthy behaviors CDH plan designs will be improved each year (one percent addition in actuarial benefit value each year starting in 2009) Consumerism features such as deductibles and coinsurance will be added to the HMO and PPO each year (two percent reduction in actuarial benefit value each year starting in 2009) Strategic pricing utilized to provide incentive for CDH plans Expect gradual enrollment shift from HMO/PPO plans to HRA and HDHP plans Savings achieved on active population reduces OPEB liability

6 Procurement for 2009 Contracts In accordance with the multi-year strategy to streamline administration and focus on consumerism, SHBP conducted a procurement to identify two vendors who could offer the required five products on a statewide basis More than half of SHBP’s covered population lives outside metro Atlanta, and while members had very strong coverage and numerous choices in metro Atlanta, they were lacking choice in the rest of the state In the procurement evaluation, statewide access to a comprehensive network of providers was the category awarded the most points – over 1/3 of the total points available Legislation allowing SHBP the flexibility to not offer CCO (due to low utilization) was passed during 2008 Session In August 2008, DCH Board approved removal of CCO and Indemnity options from 2009 suite of products

7 Impact to employees Impacted employees/retirees: –BCBSGa: 79,656 –Kaiser: 21,241 –Indemnity: 4,386 –CCO: 6,419 Based on claims analysis, over 97% of physicians utilized by the BCBS members are participating in the CIGNA and/or UHC networks Due to the unique nature of Kaiser’s staff model HMO, the decision was made to allow Kaiser members an additional year to research and select new physicians; therefore Kaiser will be offered to current Kaiser members for 2009 Combining the 3% disrupted BCBS members and 100% of the Kaiser members, less than 7% of entire SHBP membership will be impacted by physician-patient disruption

8 Q SHBP Product Performance

9 Benefit Changes Full Mental Health Parity on all options HRA plan enhancements: –$125 additional “cash” added to HRA accounts ($250 for employee + spouse) for members who get an annual preventive care screening and complete a Health Assessment –No cost for certain drugs for members with diabetes, asthma and cardiac conditions who remain enrolled in and actively compliant with the Disease Management program guidelines Out-of-pocket maximums, some co-pays and some deductibles will be changed to provide more comparability between plans and further incent members into the consumer-directed plans

10 Medicare Advantage Plans Two Private Fee for Service (PFFS) plans covering entire state Optional for Medicare-eligible retirees Automatically covers all parts of Medicare (A,B,C,D) Benefits enhanced over standard Medicare to cover: –$1,000 annual out-of-pocket maximum and lower co-pays –Unlimited inpatient hospital days –No hospital stay required prior to Skilled Nursing Facility –Worldwide emergency room coverage –Routine Chiropractic visits –Routine Podiatry visits –Routine vision exams and hardware ($125/2 years) –Hearing exams and hearing aid benefit ($1,000/4 years)

Open Enrollment (OE) Activities 2009 OE: October 10 – November 10 Letters to all members impacted by plan option changes were mailed in July/August Personalized benefits statements modeling which plan option would result in lowest out-of-pocket costs (utilizing employee’s actual 2007 claims) will be mailed to all employees’ homes prior to OE – hand out Over 1,500 Webinars and face to face educational meetings will be conducted in preparation for OE

12 SHBP Subscribers Enrollment 12 Plan Options: PPO HMO HRA High Deductible Health Plan Medicare Advantage Private Fee for Service –Cigna –United Healthcare HMO Senior Advantage –Kaiser January 2009

13 Healthcare Vendor Sample ID Cards See... Exhibit A – CIGNA Healthcare, Inc. Exhibit B – UnitedHealthcare, Inc.