Structuring Choice in the Commonwealth Connector February 26, 2009

1. Structuring Choice in the Commonwealth Connector February 26, 2009

2. Number & kinds of benefits options depends on type of connector • CommCare: exclusive purchasing group • CommChoice YAP: exclusive distribution channel • CommChoice non-group: alternate distribution channel • CommChoice small-group: offers choice to employees

3. How many & what kind of benefits options • CommCare: exclusive purchasing pool for low income uninsured adults • Total of 15 different plans: • 1 standard HMO plan (w/ & w/o dental) • Progressive schedule of copays • Progressive schedule of contributions • 5(?) different MCOs (2-5 per area/PT)

4. How many & what kind of benefits options • YAP: exclusive distribution channel for non-poor, non-ESI eligible, 18-26 • Total of 12 different options: • 1 standard HMO plan (w/ & w/o Rx) • Some select, some broad networks • Most with benefits cap, two without • 6 different HMOs (4-10 per area)

5. How many & what kind of benefits options • CommChoice: alternate distribution channel for non-group & packaging plan choice for small-group employees • Total of 25 (of 180) different options: feedback is very helpful, streamlined way to buy insurance • 3 benefit tiers • Some select, some broad networks • Some w/ deductibles, some without • 6 different HMOs • 2-10 options per tier/area

6. Bidding and Price Comparisons • CommCare purchases health insurance for low-income enrollees - Competitive bidding under pegged pricing - Acuity adjusted capitations - Qualify, enroll & continue to serve beneficiaries • CommChoice assures value of insurers’ products (benefits/premium) • Awards Seal of Approval to high value plans • For actuarially standardized benefits • Allows clear price/benefits comparisons • Makes it easy to shop

7. Evolution of Mass. non-group market

8. Individuals told us 3-5 HMOs at high, medium & low benefit levels MCC Coverage for a 37-year-old Bostonian, April 2009

9. Individuals told us 3-5 HMOs at high, medium & low benefit levels MCC Coverage for a 37-year-old in Worcester, April 2009

10. “Take-Aways” • 40%-60% premium “swings” on each tier • Significant membership for plans at both ends of spectrum (price & network) • CommChoice promotes price-shopping: • Bronze has 59% share • NHP & FCHP get disproportionate share

11. Decision Points for SoA RFR • Right benefit tiers? • More standardization/less choice within tiers? • New/different mix of products? • Better value carriers/plans? • Too much disruption?

12. Seal of Approval Process Overview February 26, 2009

13. SoA Process Overview • As specified in Chapter 176Q, SoA signifies a health benefit plan meets certain quality & value standards approved by the Board • Connector Authority is to facilitate availability, choice and adoption of private health insurance to eligible individuals and small groups • Products to be available beginning 1/1/2010

14. Goals of SoA Process • Select and offer high value plans • Align choice of plan designs and carriers with consumer demand • Enhance simplicity of consumer shopping experience • Minimize risk selection • Inside and outside of the Heath Connector • Among participating health plans • Maintain continuity of coverage for existing ~21,000 CommChoice enrollees

15. Advance Health Care Reform • Success to date in Individual Market • Individual market has more than doubled since c.58 • 30% of this growth has come through CommChoice • for some carriers Choice is more than 50% of new growth • Would like to strengthen this role • Small Group offering just started

16. Benefits and Tiers • Balance choice and simplicity • Need to balance demand for choice, ease of buying, and continuity of plans for individuals and small firms • Benefit and tier organization • Assessing benefit designs available in each tier (Gold, Silver, Bronze) • Assessing relative value between tiers

17. Number of Benefit Designs - Current • 37 plans are available to new purchasers • 12 exclusively for young adults • 25 for “regular” non-group Plus: • 9 for “renewals only” • 8 are “closed” to new entrants (non-Rx plans) and will sunset

18. Number of Benefit Designs - Current • Of the total 37 open plan designs: • 6 are in Gold tier • 12 are in Silver tier • 7 are in Bronze tier • 12 are in Young Adult

19. Membership by Plan Design Gold • 60% of members in two plans (out of 11) Silver • 60% of members in five plans (out of 15) Bronze • 60% of members in two plans, and 80% of members in four plans (out of 14, 6 closed) YAP • 60% of members in 3 plans (out of 14, 2 closed)

20. Membership by Carrier • Over 90% of membership is in 4 of the 6 carriers • However, fifth carrier has some 30% market share in Western Mass

21. Next Steps • Perform Market Research • Surveys • Focus Groups • Analyze benefit take-up outside of CommChoice • Informing to development of SoA specifications

22. Goals of SoA Process • Select and offer high value plans • Align choice of plan designs and carriers with consumer demand • Enhance simplicity of consumer shopping experience • Minimize risk selection • Inside and outside of the Heath Connector • Among participating health plans • Maintain continuity of coverage for existing ~21,000 CommChoice enrollees