1. ©2009 Regence Life and Health. Private and Confidential. DBRA Annual Meeting 2012 View of the dental benefits industry

2. ©2009 Regence Life and Health. Private and Confidential. Dental is highly valued Dental is the #2 requested benefit after medical Care is needed #1 cause of ER visits Children's Hospital Seattle Self esteem issues in childhood due to pain & appearance Coverage is often equivalent to access People with benefit see the dentist more Have better oral health

3. ©2009 Regence Life and Health. Private and Confidential. Dental is dysfunctional Poor member experience w. exclusions, limitations, utilization review for limited benefit $1000 PEPY for $1500 Annual Benefit?!? Source Mercer survey: West Coast Dental benefits plateau – drop in market size before recession through today (NADP) Our own employee feedback

4. ©2009 Regence Life and Health. Private and Confidential. Business model issues Reversed leveraged trend & impact on annual max

5. ©2009 Regence Life and Health. Private and Confidential. Business model issues cont. Lack of ROI w. utilization controls Decreasing value of network discounts EBD is nice but…. All becoming like Ortho

6. ©2009 Regence Life and Health. Private and Confidential. Future Dollar based outperforms w. higher annual max $2500 to $5000 annual max sweet spot RLH 5 year experience w. Individual products Dollar-based product up 25% in 5 years Procedure-based product up 66% in 5 years Simple to understand Admin costs can be used differently in lieu of utilization management and cust. svc calls. Allows for transparency

7. ©2009 Regence Life and Health. Private and Confidential. Need for transparency The only true way to reduce costs… Markets work Dollar based products function w. transparency, just like HSAs

8. ©2009 Regence Life and Health. Private and Confidential. Importance of marketing #2 requested benefit But 50% uninsured rate More people have cell phone plans than dental insurance Why? Poor direct to consumer marketing

9. ©2009 Regence Life and Health. Private and Confidential. Future cont. More dollar based products, all funding options In more areas Service enhancements: admin justification for good experience, not utilization management Transparency “Real” marketing Market density efforts All group sizes and individual