1. Covering the Expansion Population ACAP CEO Summit Pat Wang President, Healthfirst July 14, 2010

2. 2 Agenda About Healthfirst Medicaid Expansion Our Experience and Observations

3. 3 Healthfirst is a provider-owned, not-for-profit plan focused on underserved populations in NY and NJ Membership  550,000 total −445,000 Medicaid and Child Health Plus −91,000 Medicare Advantage Part D (MAPD), including 45,000 Dual Eligible Special Needs Plan (SNP) −14,500 New Jersey Family Care  550,000 total −445,000 Medicaid and Child Health Plus −91,000 Medicare Advantage Part D (MAPD), including 45,000 Dual Eligible Special Needs Plan (SNP) −14,500 New Jersey Family Care Mission  To improve the health and well-being of underserved populations Organization  Not-for-profit HMO founded in 1993  Sponsored by 21 unaffiliated New York not- for-profit and public hospitals and systems  Hospitals assume financial risk for members selecting affiliated PCPs  Not-for-profit HMO founded in 1993  Sponsored by 21 unaffiliated New York not- for-profit and public hospitals and systems  Hospitals assume financial risk for members selecting affiliated PCPs Healthfirst Organization MembersMission 1 2 3 1 2 3 Overview of Healthfirst

4. 4 By 2019, health reform will expand Medicaid by more than 16MM lives, 80% of whom are childless adults Sources: (1) Patient Protection and Affordable Care Act, Mar 2010; (2) Congressional Budget Office; (3) “Coverage for Consumers, Savings for States: Options for Modernizing Medicaid”, United Health Center for Health Reform and Modernization, Apr 2010 Health Reform: Medicaid Expansion  PPACA expands Medicaid eligibility to all households with incomes up to 133% of the federal poverty level (FPL) 1  Impact of Medicaid expansion will vary by current Medicaid eligibility criteria. Greatest growth will occur in: −States with Medicaid thresholds below 133% FPL −Expansion populations (i.e., childless adults)  PPACA expands Medicaid eligibility to all households with incomes up to 133% of the federal poverty level (FPL) 1  Impact of Medicaid expansion will vary by current Medicaid eligibility criteria. Greatest growth will occur in: −States with Medicaid thresholds below 133% FPL −Expansion populations (i.e., childless adults) Total Expansion: 16MM lives 2 Childless Adults 3 80% Today’s Focus

5. New York Expanded in 2 Steps New York expanded to former “General Assistance” population and to other childless adults Sources: (1) “New York: A Case Study in Childless Adult Coverage”, Economic and Social Research Institute, Aug 2004; (2) Patient Protection and Affordable Care Act, Mar 2010; (3) “Where are the States Today”, Kaiser Family Foundation, Dec 2009; (4) “Childless Adults: Barriers to Enrollment in Public Health Insurance”, National Center for Law and Economic Justice, Apr 2010 ; (5) Healthfirst Analysis; (6)NYS Medicaid Managed Care Report, May 2010; (7) NYS Family Health Plus Report, May 2010 5 Year 2014 1997 2001  New York is one of 5 states that offers Medicaid or Medicaid-like health insurance to childless adults 3  Eligibility criteria for childless adults is among the most generous in the U.S. 4 −Nearly 80% FPL for Medicaid −100% FPL for Family Health Plus  698K childless adults (“expansion population”) are enrolled in managed Medicaid or Family Health Plus 5 −605K Medicaid 6 −93K Family Health Plus 7  A number of highest cost GA clients remain in FFS “restricted recipient” program PPACA expands Medicaid to all populations up to 133% of the federal poverty level (FPL) 2 NYS uses 1115 waiver to incorporate needy childless adults - the General Assistance (GA ) population - into Medicaid Managed Care 1 NYS creates Family Health Plus (FHP), reaching childless adults up to 100% FPL 1 Event 2010 Patient Protection and Affordable Care Act (PPACA) is passed 2

6. 6 Note: (1) FHP (Family Health Plus) is a fully subsidized health insurance program for adults funded by New York State. Income restrictions are tighter for childless adults than for parents. Sources: NYS Medicaid Managed Care Report, May 2010; NYS Family Health Plus Report, May 2010 Healthfirst has the largest share of the expansion population in New York City NYC GA/FHP Membership by Health Plan, May 2010 Membership 1

7. Disease Profile by Cash Assistance 7 Two sub-groups, each with distinct disease profiles, characterize this membership  42% classified as “healthy” or “healthy non-user”  More than 25% have chronic illnesses – including 2% with HIV  Relatively high rate (~10%) of mental health and substance abuse issues (e.g., schizophrenia)  Weighted average CRG of 1.82  Majority (56%) classified as “healthy” or “healthy non-user”  More than 20% have a chronic illness  Lower rate (~2%) of mental health and substance abuse issues  Weighted average CRG of 0.93 Source: Healthfirst analysis, Nov 2007, Jun 2010 Cash Assistance sub-group has a weighted CRG that is twice as high as the No Cash Assistance sub-group Cash Assistance Sub-GroupNo Cash Assistance Sub-Group

8. 8 Cash Assistance cost is most similar to SSI, signaling the greater needs of this group (1) Adults with children Source: Healthfirst Analysis, Oct 2008 and June 2010 PMPM Cost By Population Type Key Points  Expansion population adult sub- groups have greatest disparity in cost (over 2X) −Cash assistance adults have PMPM costs similar to cash assistance SSI population −Adults without cash assistance have similar PMPM costs to the TANF Adult population  Expansion population adult sub- groups have greatest disparity in cost (over 2X) −Cash assistance adults have PMPM costs similar to cash assistance SSI population −Adults without cash assistance have similar PMPM costs to the TANF Adult population 1 16% of HF’s expansion population receives cash assistance

9. 9 We have taken several approaches to managing care for this group……. Source: Healthfirst Analysis Healthfirst Approach to Cash Assistance Expansion Members Cash Assistance GA Population Staffing More staff with social work experience Staffing More staff with social work experience Programs Systematic support for behavioral health needs Programs Systematic support for behavioral health needs Network Provider partnerships to better manage behavioral health needs Network Provider partnerships to better manage behavioral health needs Funding Greater funding for improved ability to address high needs population Funding Greater funding for improved ability to address high needs population 1 23 4

10. ……But there are significant challenges 10 ApproachRationaleHealthfirst Activity / Challenge Staffing  Social work / behavioral health expertise strengthens ability to serve members with unstable social situations and high incidence of behavioral/medical health issues  Employ social workers as care managers to address members’ social barriers to health  Consider hiring medical director with psych specialty Programs  Programmatic interventions address member social / functional needs in order to reduce barriers to health  Care management staff connects members to appropriate social services agencies  Complex care management (currently used for Medicare and Medicaid SSI) extended to this group  Try to work with COBRA case managers, other FFS providers to coordinate care Network  Higher risk / severity of behavioral health issues with medical dx requires different provider approach  Partner with hospital innovators working on mental health-medical homes  Some undersupply of psychiatrists willing to see members constrains effective medication/other management Eligibility  Many cash assistance members are eligible for SSI and would be better served by greater enrollment stability and cash benefits  Identify and convert eligible members to SSI  HIPAA requirements around written member consent impede efforts for mentally ill population 1 2 3 4

11. 11 Medicaid expansion requires appropriate support structures Optimal Expansion to GA population $ SSI  Network standards  Quality standards State Oversight Payment Methodologies Correct Classification What to watch for  Risk Adjustment: properly fund coverage of sicker population  Premium Groups: preferable to create separate premium categories for this group; they are not typical TANF adults  Facilitate identification and conversion of SSI- eligible to provide greater enrollment stability and benefits