A Consumer Operated and Oriented Plan “CO-OP”

1. A Consumer Operated and Oriented Plan“CO-OP”

2. Why the Health Reform Debate? • CMS forecasts growth for Private Plan Medicare and Medicaid spending to grow from: • $2.6 trillion and 17.5% of GDP in 2010 to $4.5 trillion and 19.6% of GDP by 2019

3. Why the HealthReform Debate? • CMS forecasts project consumer out-of-pocket spending to grow from $284 billion in 2009 to $466 billion in 2019

5. Post Reform Business Model

6. CO-OP-Mission • Foster creation of “consumer” governed nonprofit health plans offering plan accountability, high quality, low cost, and coordinated care • Enhance competition by providing additional choices for consumers and small businesses

7. Governance • Initial Board candidates who bring health insurance and health care expertise • Within 2 years Board consists of at least 51% consumer members

8. National Association of State Health CO-OPs (NASHCO) • Arizona, Colorado, Connecticut, Illinois, Iowa/Nebraska, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, South Carolina, Tennessee, Utah, Vermont, Wisconsin

9. CO-OP Profit Standards Surplus Revenue used to: • Lower premiums • Improve benefits • Improve Quality • Re-Pay CMS start up loans • Provide sufficient reserves for growth, statutory requirements, provider payments and plan stability

10. Consumers Mutual Development • Consumers Mutual initial organizers- 15 County Health Plans representing 61 Michigan Counties

11. Consumers Mutual Board • President-Bruce Miller, Executive Director of Northern and TENCON Health Plans • V.P.-Robin Reynolds, Executive Director Ingham County Health Plan • Treasurer-Bruce Bragg, past Executive Director Ingham County Health Department

12. Consumers Mutual Board • Assistant Treasurer-Joan Moiles, former OFIR regulator • Secretary-Jan Hudson, Sr. Policy Analyst MI. League for Public Policy • Chris Shea, CEO, Cherry Street Health Services (FQHC) • Frank Belsito, D.O., EVP Metro Health Medical Group

13. Consumers Mutual Board • Mitchell Tomlinson, President & CEO, Peckham, Inc. • David Jahn, President & CEO, Chippewa County War Memorial Hospital

14. Consumers Mutual Status • May 2012 CMS awards $72,000,000 Loan ( $18,000,000 Start Up, $54,000,000 Solvency) • Senior Staff in place • Health Plan Design and Actuary work near completion

15. Consumers Mutual Status • TPA and PBM contracted • Network Development- 65 LOIs moving toward final contract from PHOs, Hospitals, FQHCs, IPAs, and Ancillary Providers

16. Network Development

17. Consumers Mutual Product • Gold, Silver, and Bronze plans both on and off Exchange to Individuals and Small Groups • Initial population targeted is 138% to 400% of poverty; over 400% also eligible

18. Consumers Mutual Enrollment Projections • Michigan has 11th highest state uninsured population: 1,209,000 • Total population available from 138% to 400% of poverty: 542,000 • Enrollment projections: 37,000 lives in 2014 and 85,000 lives in 2017 • Projected penetration rate of 6.8% in year one and 15.6%in year four of uninsured between 138% and 400%

19. Michigan Uninsured

20. Employer Based CoverageNon-Elderly

21. Individual Coverage Non-Elderly

22. Consumers Mutual Market • The 542,149 uninsured between 138% and 400% of poverty • Individuals above 400% and Small Groups

23. Why Consumers Mutual will be Attractive to Michiganders • CO-OPs have a history of acceptance in the farming industry states • Credit Unions are widely successful under a similar governance model

24. Why Contract with Consumers Mutual • Consumer driven • Transparency • Fair commercial rates to providers • Expanded health benefits • Low premium rates • Population health management model

25. Provider, Business and Consumer Benefit • Affordable alternative for the uninsured population and small business • Reduce uncompensated care for Providers thereby improving Profitability • Reduction in cost shifting of uncompensated care to Individuals and Businesses

26. CO-OPs Breaking the Cost Shift & Uninsured Cycle Source: Texas State Comptroller Office

27. ACA Savings for Families and Small Businesses • HHS claims middle class families could save $2,300 in premiums and small businesses $350 for each family covered

28. Some Others Thoughts • “CO-OPs are tough enough to keep Insurance Companies feet to the fire” ~ Senator Max Baucus of Montana • “Supporters know, here in Minnesota and other farm states, that CO-OPs could solve at least a big chunk of the healthcare access and affordability problem” ~John King of CNN Sources: New York Times (2009). Co-op Health Plan Emerging as a Senate Option. NYTimes.com King, J. (2009). Interview With Senators Klobuchar, Nelson; Interview With Governor Pawlenty. State of the Union with John King. CNN.com

29. Some Others Thoughts • Bill Oemichen, President of the Minnesota Cooperative Network, stated that 65% of those who switched from typical insurance to a CO-OP reported better coverage and service • Regarding CO-Ops: “If it’s all done entirely within the private sector, you know, it doesn’t seem to me it has the faults that you have by having the government institute something.” ~Republican Senator Chuck Grassley Source: King, J. (2009). Interview With Senators Klobuchar, Nelson; Interview With Governor Pawlenty. State of the Union with John King. CNN.com Source: Wangsness L. (2009) Health Debate Shifting to Public vs Private. Boston Globe. Boston.com

30. Concluding Thoughts • Consumers Mutual and the other State funded CO-OPs plan to be partners with the Purchasers, Providers and Consumer recipients of health care services • Consumers Mutual is a transparent organization and will strive to create a High Quality, Financially Viable, and Efficient Health Plan to serve the Michigan Community

31. Questions and Discussion CEO Contact: dennis.litos@consumersmutual.org