September 10, 2013

1. University of CaliforniaUnion Coalition Health Program Bid Update September 10, 2013

2. Overlap in Plan Design & Accelerated Rate Increases in “Premium Tier” (Inclusion of high cost providers driving double digit rate increases in Premium Tier.) 2013 Medical Program Portfolio PREMIUM Tier Higher cost to enroll • Health Net Full (HMO) • Best Member Fit: • Want providers not available in Blue & Gold network, but don’t need a non-network option • Agreeable to HMO model, PCP role, staying in medical group • Accept higher premium but want lower cost per service • Anthem PLUS (POS) • Best Member Fit: • Want access to non-network providers, but accept PCP model for in-network care • Accept higher premium but want fixed copays in-network • Anthem PPO • Best Member Fit: • Want access to in & out of network providers • Want direct access to all providers without PCP or medical group restrictions • Accept higher premium and cost per service • Health Net Blue & Gold (HMO) • Best Member Fit: • Want lowest premium and cost per service • Agreeable to HMO model, PCP role, staying in medical group • Comfortable with smaller selection of providers • Anthem Lumenos PPO w/ HRA • Best Member Fit: • Want lower premium without limiting access to providers • Accept need to learn and manage plan; risk of incurring greater out of pocket costs • See opportunity to grow balance in health care reimbursement account for future use • Kaiser(HMO) • Best Member Fit: • Want lowest premium and cost per service • Comfortable with getting care only within Kaiser system VALUE TierLower cost to enroll

3. Scope of Request for Proposals (RFP)5 Separate RFPs issued for the products noted below Network HMO Account-Based PPO Rx Benefit Management Wellness/DM NEW OFFERRING: UC CARE

4. …….From January 24 Union Coalition Presentation Example of Possible 2014 Portfolio* Plans/program elements shaded in yellow are not subject to this bidding process * Actual 2014 portfolio will not be known until proposals are received and evaluated and product costs are confirmed.

5. Disposition of Carve Outs

6. Awarded Vendors

7. Portfolio Change - Sustainable Cost (For Members and UC)- Comprehensive Care- Distinct Value

8. New Products • UC Care • Health Savings Plan

9. UC Care: Network & Plan Design • PPO plan that allows members the choice to see care from providers either in-network or out- of- network • Blue Shield of California – is the claims administrator and network provider • Members utilize the BlueCard network outside of California

10. UC Care: Network & Plan Design Non-UC Medical Center Markets UCOP, Berkeley, Riverside, Santa Cruz, Santa Barbara and Merced • UC Select: Blue Shield “UC select” providers • Blue Shield Preferred: Providers in the full Blue Shield Preferred (PPO) network UC Medical Center Markets Davis, Irvine, Los Angeles, San Francisco and San Diego UC Select: All UC medical centers, provider groups, and affiliated providers Blue Shield Preferred: Non-UC, Providers in the full Blue Shield Preferred (PPO) network; all services not available at UC

11. Blue Shield Health Savings Plan • New high deductible plan with a Health Savings Account (HSA) • Replaces the Anthem Lumenos high-deductible HRA-PPOand has similar • “out of pocket” cost as Lumenos • Blue Shield PPO + Health Savings Account • Blue Shield’s large * UC provides an initial contribution • Provider network offers * Member can also make contributions • a wide choice of doctors * No “use it or lose it” feature • and hospitals OR you can *Pay for health care with tax-free dollars • see out-of-network providers * HSA fund is owned by member • if you want to pay more.

12. Plan Choice Priorities Member Priority

13. Health Net Full Network – Possible Migration Paths * Health Net Full Network Blue & Gold • 1/3 of HN Full Members aligned with Blue & Gold providers • Members who prioritize network HMO benefit, whose provider is not in UC Care Tier 1, and who are willing to change providers * Profile: Have made decision to pay more to keep current provider while keeping HMO benefits. UC Care • Members who prioritize keeping current provider at highest available benefit level (Tiers 1/2) • Members aligned with UCMCs if UC Care rate < Blue & Gold rate HSA PPO • Members who prioritize keeping current provider at lowest available contribution rate • Members who see financial advantage in savings plan • Those in good health Kaiser • Members who prioritize highest available benefit for lowest available cost, willing to change providers

14. Anthem PPO – Possible Migration Paths Anthem PPO Blue & Gold • Members using UCMC/MG only if UC Care at higher price point and willing to accept restriction to network providers and primary medical group/PCP model Profile: Willing to pay highest premium for the most provider choice and fewest managed care applications (e.g., no PCP) * UC Care • Members using UCMC/MG and other Tier 1 providers • Members who prioritize PPO benefits and whose provider is in Tier 2 * HSA PPO • Members who prioritize current provider relationship and provider is not in UC Care Tier 1 or 2 • Members who see financial advantage in savings plan – generally higher income, good health, not near retirement age Kaiser • Members who fundamentally rethink benefit priorities and opt for highest available benefit for lowest available cost, willing to change providers

15. Migration Path – Anthem PLUS Anthem PLUS Blue & Gold • Members using Blue & Gold providers that are not available in UC Care Tier 1, if willing to accept network-only providers in exchange for maintaining fixed copay Profile: Accept PCP model, prefer fixed copays, but want option to go out-of-network. * UC Care • Members using UCMC/MG and other Tier 1 providers • Members whose provider is available in Tier 2 but not in Blue & Gold * HSA/HRA • Members who prioritize current provider relationship and provider is not in UC Care Tier 1 or 2, or B&G • Members who see financial advantage in savings plan – generally higher income, good health, not near retirement age Kaiser • Members who fundamentally rethink benefit priorities and opt for highest available benefit for lowest available cost, willing to change providers

16. Open Enrollment October 28 – November 26

17. Wellness Program • NEW DIRECTION IN WELLNESS WITH NEW VENDOR – OPTUM HEALTH • Eligibility • Incentive now available to Kaiser members • Spouses: no longer eligible for incentive but have access to Optum (and/or Kaiser) wellness resources (online tools, health coaching) • Incentive • $75 Gift Card • Point System to earn Gift Card • Many UC and Vendor activities available to earn incentive • Health Assessment • No longer required for Gift Card • Still available for members having interest in personal health status

18. UC Wellness SolutionEngaging Individuals. Inspiring Healthy Behaviors

19. What We Do at OptumHealth NEARLY 5.3 MORE THAN HALF * BILLION in electronic transactions We provide health management and financial services solutions to more than half of the Fortune 100 companies* PER MONTH More than 8,500 Health Events 1 ** MILLION AND OVER health 600,000 assessments MEMBERS for biometric screenings ** COMPLETED ANNUALLY FINANCIAL SERVICES WE SERVE CARE SOLUTIONS 1 in 5 MANAGES APPROXIMATELY OPERATES 2.7 2,000 * MILLION consumers dedicated portals ACCOUNTS IN THE UNITED STATES All as of 6/30/12, except where noted; *as of 3/31/12; **as of 12/31/2011

20. University of California Wellness Absolutely no sharing of individual data/information outside of Optum - UC Wellness priority is individual improvement • Optum is HIPAA Compliant • NO sharing of personal, identifiable information with medical plan • NO sharing of personal, identifiable information with UC • No penalties or surcharges for non-compliance of any kind • Participation is voluntary, rewarded and appreciated • Health assessment provides information to individuals who are interested in behavior change • Outreach to individuals who may benefit from coaching assistance • Refer individuals to options in medical plans who may have a greater sense of urgency for assistance A shared common goal of healthy employees and their families

21. Total Health Profile Health Assessment • New approach to the way we think about health assessments —No more “HRAs” • INDIVIDUAL DATA/INFORMATION IS NOT SHARED OUTSIDE OF OPTUM • Addresses well-being — emotional, social, career, financial, sleep, pain and mental health • Uses more-comprehensive risk assessment to go beyond standard risks to identify individuals with a greater sense of urgency • Produces immediate feedback as individuals participate with highly tailored results • Enhances approach to behavior change • Provides highly relevant messages and recommendations for action: assess goals, barriers and benefits to change; social networks; core values; and perceptions of health For display purposes only, final subject to change. 20

22. University of California Wellness Coaching • Inclusive Model: We offer telephonic and online support to all individuals regardless of risk level 39% of all weight loss occurs with those who have a BMI<30* • Delivered by cross-trained coaches who provide a personalized and holistic approach • 66% of completers achieve their goal; of those, nearly 51% achieve a secondary outcome as well* 21 Source: *Optum Book of Business results; **Optum Risk Reduction Survey, 2012

23. UC Member Consumer Centric Coaching Modules Weight Management 214,000 total pounds lost Average weight loss for losers is 8.7lbs Quit Power 39% quit smoking 15% reduced tobacco intake by 50% or more (excludes quitters) Nutrition 57% reduced to less than 2 fatty food servings Average weight loss for losers is 5.7lbs Exercise 132 minutes of average increase in exercise minutes Average weight loss for losers is 6.6lbs Stress 45% of enrollees reduced stress Heart Health 63% reported a heart health lifestyle improvement 38% lost weight Diabetes Lifestyle 35% better manage their condition through lifestyle changes Average weight loss for losers is 7.1lbs OptumHealth Wellness Coaching receives a 96% overall program satisfaction rate, 97% Coach satisfaction as able to answer my questions, and 87% recommendation rate

24. Health Assessment Creating A Consumer Centric Supportive Environment Action Plans Health & Wellness Website Incentives Health Trackers Nurses and Coaches:eSync Value Interface

25. Optum’s unique approach can help We have a track record of helping people succeed because of how we approach improving health outcomes. Our focus on (1) driving personal engagement, (2) guiding better health decisions,and (3) delivering personalized health improvementcreates Health Ownership. Here’s how we move people to sustainable health action … Healthy living is possible 24

26. Questions?