1. Commonwealth Care – Prudent Purchasing Model Patrick Holland Chief Financial Officer

2. 2 Commonwealth Care Subsidized Health Insurance Program for adults earning up to 300% of the FPL Standard benefit package (minor difference for members at or below 100% FPL) Progressive schedule of monthly premiums and co-payments Membership currently at ~150,000

3. 3 Commonwealth Care Currently Five Health Plans participating in Commonwealth Care Capitation model with specific stop loss reinsurance and aggregate risk sharing features Use of predictive modeling to minimize practice of “risk selection” by insurers Closed insurance pool thereby negating “adverse selection”

4. 4 Commonwealth Care Procurements are done annually Over course of our four years, have continually evolved procurement specifics Create incentives for MCOs to bid low Heavy use of claims-paid data and analytics to understand enrollment and cost dynamics

5. 5 Commonwealth Care Key Elements of Successful Purchasing –Managed Competition –Transparency of Process –Technical & Analytical Expertise –Planning & Communication

6. 6 Managed Competition Fortunate to have a high number of high- quality, cost-effective health plans in market Plans compete for membership Role of Connector is to harness this competition through alignment of incentives between state and health plans

7. 7 Transparency of Process Public meetings of BOD in which all elements of procurement discussed Symmetry of baseline enrollment, claims and financial performance data between health plans & Health Connector Key capitation & enrollment assumptions also disclosed Regular communications with the health plans before and after procurement process

8. 8 Technical & Analytical Expertise Development of Capitation rate is fair and reasonable Monthly review of enrollment dynamics Quarterly review of health plan financial performance Innovative use of predictive modeling software to smooth emerging risk selection in program

9. 9 Planning & Communication Goals of procurement established at BOD and communicated to all parties Timelines established well in advance Disciplined approach in working through established procurement process Focus on ensuring program is value-add for: –Members, Health Plans, State

10. 10 Commonwealth Care’s Premium Trend