Minimum Creditable Coverage Policy Committee Meeting January 19, 2007

1. Minimum Creditable Coverage Policy Committee Meeting January 19, 2007

2. Minimum Creditable Coverage • Establish the floor below which insurance products will not meet requirements of individual mandate • Offer products that: • Protect beneficiaries from catastrophic costs • Promote access to routine preventive care

3. Minimum Creditable Coverage • Balance premium affordability with potential out-of-pocket costs • Encourage preventive care • Cover core medical services

4. MCC Exclusions • Fee schedule based coverage • Limits per sickness/illness/annual/lifetime

5. MA Non-Group Market (pre-merger) • 45,200 lives covered as of 12/31/05 • > 40% age 50 or older • < 20% under age 30 • Limited options • HMO or PPO, with or without Rx coverage • Over 85% enrolled in HMO products • Over 18,000 buy products w/out Rx coverage • 4,500 purchase high deductible PPO • $5,000/$10,000 deductibles (ind./fam.)

6. National Non-Group Market • AHIP non-group survey conducted in 2004 • Broader and younger age distribution than MA market • > 35% under age 35 • < 30% age 50 or older • 85% enrolled in PPOs • Average deductibles ~ $2,000 • 20% co-insurance in network • 40% co-insurance out-of-network • Out-of-pocket maximums between $3,500 and $4,000

7. MA Small Group Market (pre-merger) • 759,000 lives covered as of 12/31/05 • Over 85% enrolled in HMO products • Approximately 10% purchase policies with a deductible • Average deductible is less than $1,000 • In-network co-insurance is virtually non-existent • Average office visit co-payment -- $15-$20 • Inpatient admission co-payment is $250 • Increase in number of policies with $500 co-payment

8. National Small Group Market

9. National Small Group Market