1. “Commonwealth Choice” & the Health Connector Exchange: Design Issues & Lessons Learned Kevin Counihan Chief Marketing Officer MA Conference on National Reform and State Exchanges January 21, 2010

2. 2 Agenda 1.Overview 2.Enrollment in Health Connector Exchange 3.Preliminary Design Issues for Exchanges 4.Lessons Learned

3. 3 Commonwealth Choice Roles of Health Connector

4. 4 Commonwealth Choice Role of Health Connector Complex Roles: Regulator –Minimum Creditable Coverage (MCC) –Affordability Schedule –Section 125 Regulations Procurement –Health Plans –Seal of Approval Benefit Plan Designs –“Subconnector” administration Distributor –On-line Distribution and Enrollment –Broker support

5. 5 Commonwealth Choice – Role of Health Connector Establish and administer Commonwealth Choice™, a commercial insurance “exchange:” –Evaluate and recommend health plan offerings –Standardized benefit plans & provide Seal of Approval –Provide more affordable coverage options (small group/non-group market merger) Facilitate access to unsubsidized access to coverage for: –Individuals earning above 300% of FPL –Part-time employees –Young adults (age 18 – 26) –Small groups (1 – 50 ees)

6. 6 Make Policy Decisions as Authorized by Health Reform law Educate individuals, employers, brokers/ consultants about law and Connector products Digital Marketing –Search Engine Marketing –Pay-per-Click –Social Networks Commonwealth Choice – Role of Health Connector (cont.)

7. 7 Subsidized Uninsured Small Employers Other? Non-Group Commonwealth Choice Exchange and Target Markets

8. 8 Commonwealth Choice: Unsubsidized Marketplace for Non- & Small-group

9. 9 Enrollment Process Vince Age 37 Lives in Shrewsbury Uninsured Wants Non-Group, Single Coverage Wants Good Value in Insurance Purchase Sensitive to Monthly Costs Wants MD Choice Wants Easy Access to Information

10. 10 What benefits do I want?What benefits do I want? How much do I want to spend?How much do I want to spend? Location of MDs/hospitalsLocation of MDs/hospitals Plan APlan A Plan BPlan B Plan CPlan C Plan DPlan D Selects Health Plan ASelects Health Plan A Completes Online EnrollmentCompletes Online Enrollment Picks a PCPPicks a PCP Pays 1 st Month PremiumPays 1 st Month Premium Collects PremiumCollects Premium Sends Vince’s Enrollment Information to Health Plan ASends Vince’s Enrollment Information to Health Plan A Online Vince: Sub-Connector Vince Decision Support Tools: Health Plan Choices: Processes Vince’s EnrollmentProcesses Vince’s Enrollment Issues Vince ID Card to EOCIssues Vince ID Card to EOC Prepared to Pay ClaimsPrepared to Pay Claims Health Plan A

11. 11 Starting List of Design Issues 1. Carrier Bidding & Selection - “Managed Competition” - Transparency - Long-term Relationships

12. 12 Starting List of Design Issues 2. Benefits Specification - Market Research - Encourage Innovation - Standardize for Easy Comparison - Manage Change

13. 13 Starting List of Design Issues 3.Remember Customer Needs: - Comprehensive coverage - Understandable benefits (“I bought what?”) - “Affordable” cost - Reduce insurance jargon, (where possible)

14. 14 Starting List of Design Issues 4. Administrative Functions - Outreach & Marketing - Eligibility Determination - Enrollment & Premium Billing - Customer Service - Appeals

15. 15 Likely Functions of Exchanges 1. Offer Coverage for Target Market Segments (non-group, small group, other?) 2. Specify Plan Designs & Coverage Tiers for unsubsidized coverage 3. Contract with & Sell Health Plans 4. Education, Outreach & Marketing 5. Oversee/Ensure Risk Adjustment 6. Ensure Compliance with Benefit Offering Rules and Requirements - Benefits determined by Feds (MCC?) - States must reimburse Feds for extra costs due to mandates beyond MCC

16. 16 Potential Value of Exchanges 1.Protecting/representing enrollees 2.Prudent purchasing of health insurance 3.Choice & “managed competition” 4.Scale economies in distribution

17. 17 Lessons Learned Hire Staff who Know Health Insurance Business Communication Never Ends Minimum Coverage / Affordability For Consumers, Keep it Simple → Less = More Nurture Stakeholder Relationships Leverage Public/Private Practices