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What to Expect in 2014

What to Expect in 2014. Fast Forward. Rick Elliott President and CEO UnitedHealthcare of Georgia. Market influencers: Movement and more movement. 20 million purchasing through Exchanges. 30 million newly insurance. 15 million affected by Medicare increases.

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What to Expect in 2014

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  1. What to Expect in 2014 Fast Forward Rick Elliott President and CEO UnitedHealthcare of Georgia

  2. Market influencers: Movement and more movement • 20 million purchasing through Exchanges • 30 million newly insurance • 15 million affected by Medicare increases 80 million potentially switching coverage Estimates above based on public sources including CBO and Lewin Group publications Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

  3. Health Benefit ExchangesState Decisions and Status NH * WA * MT ME VT * ND OR * MN* ID * MA * SD NY * WI MI * WY RI * CT * IA * PA NV * NE OH IN NJ IL * UT * CA * CO * WV * VA KS DE * MO KY * NC DC * TN OK AZ NM * AR * MD * SC AL GA MS LA TX AK FL HI * Planning to Operate State-Based Exchange, Submitted Blueprint Application to HHS (17+DC) Pursuing Federal/State Partnership Exchange (7) No State-Based Exchange (26) Conditional Exchange Approval from HHS (17+DC State-Based, 7 Partnership) * Updated March 8, 2013 UnitedHealthcare proprietary and confidential. Copying is restricted without UnitedHealthcare’s prior written consent. This is intended to provide general guidance and is not a statement of actuarial opinion, and should not be considered legal advice.

  4. The role of Exchanges In 2014–2016, individuals and small group employers can participate. 2013 2014 2015 2016 2017 By late summer or fall, employers must provide all employees with information about Exchanges. Beginning 2017, large group employers may be able to participate. Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

  5. Rating and market rule changes • Small groups and individuals move to adjusted community rating where all policyholders’ premiums only vary by location, small age bands and tobacco use • All plans: • Removal of pre-existing conditions • Guaranteed issue and renewal of coverage • No medical underwriting Huge market changes…especially for small groups For individual and small group markets Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

  6. Opportunities and Risks Pricing • Additional Rating Factors Being Eliminated or Changed • Size Factors (eliminated) • Gender differentiation (eliminated) • Typically 10-1 Age slope (changed/reduced) Current StateHigh Risk Tier 1.25 Future State Manual Rate 1.0 Less Healthy or Oldest groups Healthiest or Youngest groups Current StateLow Risk Tier .75 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

  7. Adjusted Community Rating • Price Restrictions – Fair Health Insurance Premiums • Effective January 1, 2014 • Applies to Individual and Small Group health insurance • Other related 2014 provisions apply to Individual, Small Group, and Large Group health insurance markets • Guaranteed issue and renewability • Prohibition of Preexisting Condition Exclusions • Prohibition of discrimination based on Health Status • ATNE as standard for defining Small Group • Migrate from eligibles to ATNE by 2014 • Federal Law Definition: • All employees counted – including part time and seasonal, Non-employees are not counted – example non-W-2 • Sole proprietors are included in the individual market segment • Different rules for association groups • Different measurement periods – average based on prior calendar year • Small Group defined as 1-100 in 2014; although states may elect to temporarily define the upper limit as 50 for years 2014 and 2015 • Rate Factors are limited to • Family Structure • Benefit Plan Design • Geography • Age (3:1 limit) • Tobacco use (1.5:1 limit) • Rates may not vary by • Gender • Health status • Claims history • Medical Underwriting • Group Size • Industry Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

  8. Taxes & fees to help fund the Patient-Centered Outcomes Research Institute PCORI Fee to fund Health Insurance Exchanges Insurer Fee Transitional Reinsurance Fee to stabilize individual and small group markets on rich benefit coverage Excise Tax Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

  9. Taxes and fees at a glance Projections based on analysis of study by Oliver Wyman & AHIP 2012 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

  10. Taxes and fees at a glance, continued Projections based on analysis of study by Oliver Wyman & AHIP 2012 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

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