Federal Health Care Reform Implementation Update

1. Federal Health Care Reform Implementation Update Elizabeth Hall, Vice President, Federal Affairs

2. Public Policy Platform

3. Federal Environment 2012 Timeline

4. Topics for Today • Implementation Updates • Supreme Court • Exchanges • Essential Health Benefits • Political Environment Note: This presentation is not intended to advise you on how to comply with PPACA or its related regulations. This presentation is not intended to offer legal advice. For specific questions, please consult with your counsel or benefits advisor.

5. Issue: Anti-Injunction Act

6. Issue: Individual Mandate Constitutionality • Is the individual mandate constitutional: • Commerce Clause – Can Congress force engagement in commerce/regulate “inactivity”? • Necessary and Proper Clause

7. Issue: Medicaid Expansion • Is the Medicaid Expansion Constitutional? • Is the Federal Government coercing states to expand Medicaid benefits?

8. Issue: Severability • Is the individual mandate severable? • The law includes no “severability clause” • If the law finds a portion of the legislation unconstitutional, what portion of the law must stand or fall?

9. Exchange Enabling Legislation WA ME ND MT VT NH MN MA OR NY WI SD CT ID RI MI WY NJ PA IA OH NE MD DE IN IL UT WV NV VA CO DC CA MO KY KS NC TN OK SC AR AZ NM Enacted: 13 MS GA AL Study Law: 3 LA Executive Order: 7 TX Pending bill: 12 FL AK Failed 2012: 1 Failed 2012 + planning ongoing HI No Bill + planning ongoing: 12 * Represents legislative activity as of 1/19/12, not compliance with ACA. No regular 2012 session: MT, NV, ND and TX Source: Blue Cross and Blue Shield Association, January 19, 2012

10. Exchange Timeline - 2012

11. Essential Health Benefits • Key Provisions in the Legislation • HHS to define essential health benefits (Institute of Medicine to provide guidance) • However, benefits shall include the following categories: • Ambulatory patient services 6. Mental health and substance abuse disorder services • Emergency services 7. Rehabilitative and habilitative services and devices • Hospitalization 8. Laboratory services • Maternity and newborn care 9. Preventive and wellness services & chronic disease mgt. • Prescription drugs 10. Pediatric services, including oral and vision care • Scope equal to “typical employer plan”

12. Essential Health Benefits Bulletin • HHS Gives States Four Options: • The largest plan by enrollment in any of the three largest small group products in the state • One of top 3 state employee plans in the state • One of top 3 national Federal Employees Health Benefit Program plans in the state • The top HMO Commercial plan in the state

13. Top Small Group Plans in Any of the 3 Largest Products • Anthem products are among the top 3 SG products in most states per HHS Web Portal

14. Topics for Today • Implementation Updates • Supreme Court • Exchanges • Essential Health Benefits • Political Environment Note: This presentation is not intended to advise you on how to comply with PPACA or its related regulations. This presentation is not intended to offer legal advice. For specific questions, please consult with your counsel or benefits advisor.

15. Political Environment 2012 Elections, President Obama, Congress and Health Care Reform

16. 2012 Presidential Election: The Path to 270 Electoral Votes Source: Real Clear Politics

17. Americans See Country Headed in the Wrong Direction Source: NBC News/Wall Street Journal Survey, Jan. 24th, 2012 1,000 Am

18. President Obama Approval Ratings Source: New York Times/CBS News Poll, Jan. 19th, 2012

19. Republican Base Unimpressed with Party’s Candidates • More Republican and Republican-leaning registered voters say the GOP field is only fair or poor (52%) than did so in early January (44%). • At about this point four years ago, 68% of Republican and GOP-leaning voters rated the field as excellent or good. Source: Pew Research Center

20. Obama vs. Romney Presidential Matchup • A USA TODAY/Gallup Swing States Poll from Jan. 28th found that registered voters in 12 key swing states are evenly split between Barack Obama and Mitt Romney in their 2012 presidential election preferences. • Obama and Romney have also been statistically tied in each of five polls conducted among swing state registered voters dating back to August Source: Gallup USA/Today Poll

21. Battle for the House of Representatives Current House: 242 Republicans & 193 Democrats • Magic Number: 218 Seats are needed for House Majority • Democrats Need to Win 25 New Seats to Flip House • 50 Seats are Considered Slight Lean/Toss-Ups • GOP Currently Holds 28 of those Seats • Democrats Holds 22 of those Seats Democrat Held Seats Republican Held Seats Map Source: Real Clear Politics

22. Congressional Approval Ratings Source:: Real Clear Politics

23. Battle for the Senate Current Senate: 53 Democrats & 47 Republicans • Magic Number: 51Seats are needed for Senate • GOP Need to Win 4 New Seat to Re-Gain Control of Senate • 8 Senate Races this Election Cycle are Considered Toss-Ups • 6 of those Toss-Up Senate Races are Currently Controlled by Democrats Majority Map Source: Real Clear Politics

24. Key Battleground Senate Races Up-Close • Four Most Competitive Senate Races • Massachusetts • Florida • Nevada • Virginia

25. Massachusetts Senate Race Senator Scott Brown (R-Incumbent) Elizabeth Warren (D) • Scott Brown won this seat in a special election against a weak opponent • Harvard law professor, oversaw TARP and established the Consumer Financial Protection Bureau. • Moderate voting record and bipartisan appeal • Viewed as liberal star who plays well to the deep blue party base in state • Latest poll had both candidates in statistical tie • President Obama won Massachusetts with 62 percent of the vote in 2008 • 54 percent of the state’s voters are registered independents

26. Florida Senate Race Senator Bill Nelson (D-Incumbent) Congressman Connie Mack (R) *Likely Republican Nominee* • Father was two term Florida Senator • Has been Senator since 2000 • Fits the conservative trending of the electorate • Only Democrat to hold state-wide office in a increasingly conservative state • Still needs to survive a bruising primary race • Latest poll had candidates in statistical tie • Nelson currently has a huge fundraising advantage

27. Nevada Senate Race Senator Dean Heller (R-Incumbent) Congresswoman Shelley Berkley (D) • Has represented Clark County (Las Vegas) since 1998 • Appointed to the Senate last year • Former Congressman and Secretary of State • Largely unknown outside her Vegas area district • Nevada economy has been devastated by the recession and the drag of President Obama could hurt Berkley’s chances • Polls have both candidates in statistical dead heat • Large Hispanic population and large influx of new voters

28. Virginia Senate Race Former Senator George Allen (R) Former Gov. Tim Caine (D) • Former Governor and DNC Chair • Former Governor and Senator • Chosen to run with President Obama’s message • Strong possibility that the current Gov. Bob McDonnell could be picked as Romney’s running mate • Once a solidly republican state, the voter demographics have shifted to become more favorable to democrats • Polls have both candidates in statistical tie

29. Public Remains Largely Split On ACA ACA signed into law on March 23, 2010 Favorable Unfavorable Don’t know/Refused 2010 2011 2012 Source: Kaiser Family Foundation Health Tracking Polls

30. Republican Opposition to ACA Far More Intense Than Democratic Support Total Very favorable Democrats Somewhat favorable Somewhat unfavorable Independents Very unfavorable Republicans Source: Kaiser Family Foundation Health Tracking Poll , conducted January 12-17, 2012

31. Next Steps • What happens next? • What does it mean to you?

32. Questions?