1. Section 7: Health Plans Health plan market shares Fully-insured market in total Small group and individual market HMO financial statistics Net income & margins Reserves Health Plan Medical Loss Ratios HMO enrollment statistics 1

2. HEALTH PLAN MARKET SHARES

3. Health Plan Market Shares: Total Fully-Insured Private Market, 2011 (Premium Volume: $6.2 billion) Companies with common ownership were treated as one entity. For example, Blue Cross Blue Shield of Minnesota includes BCBSM and Blue Plus. Fully insured market only, market share based on premium volume. Source: MDH Health Economics Program, analysis of MCHA Premium Database for 2010. 3

4. Market Share of Minnesota Non-Profit Health Plans 2004 to 2011 Market share calculated as share of premiums in the fully-insured health insurance market. Source: MDH analysis of the premium assessment base for the Minnesota Comprehensive Health Association 4

5. Health Plan Market Shares: Small Group Market, 2010 Companies with common ownership were treated as one entity. For example, Blue Cross Blue Shield of MN includes Blue Cross Blue Shield of Minnesota and Blue Plus. Market shares based on premium volume; fully insured market only. Source: Minnesota Department of Commerce, "Report of 2010 Loss Ratio Experience in the Individual and Small Employer Health Plan Markets for: Insurance Companies Nonprofit Health Service Plan Corporations and Health Maintenance Organizations," June 2011. Total Premium Volume in 2010: $1.49 Billion 5

6. Health Plan Market Shares: Individual Market, 2010 Companies with common ownership were treated as one entity. For example, Time Ins. Co. includes Time Ins. Co. and John Alden Life Ins. Co. Market shares based on premium volume; fully insured market only. Source: Minnesota Department of Commerce, "Report of 2010 Loss Ratio Experience in the Individual and Small Employer Health Plan Markets for: Insurance Companies Nonprofit Health Service Plan Corporations and Health Maintenance Organizations," June 2011. Total Premium Volume in 2010: $648 million 6

7. HMO FINANCIAL STATISTICS

8. Summary of HMO Financial Trends, 2006 to 2011 200620072008200920102011 Net Income$33.2$121.2$26.0$175.5$250.6$233.7 Total Revenue$5,028.5$5,366.5$5,786.3$6,582.9$6,954.5$6,971.7 Operating Income as % of Revenue -0.9%0.5% 1.9%2.6%2.3% Net Income as % of Revenue0.7%2.3%0.4%2.7%3.6%3.4% Minnesota products only. Source: MDH Health Economics Program analysis of HMO annual reports In Millions of Dollars 8

9. Net Income and Profitability by HMO, 2011 Net Income (millions) Total Revenue (millions) Net Income as % of Revenue Blue Plus $50.6$1,090.34.6% Group Health $27.0$931.12.9% HealthPartners $94.5$1,352.17.0% Medica $17.9$1,584.91.1% Metropolitan $8.6$163.85.3% PreferredOne $1.2$103.81.1% Sanford $0.0$3.2-0.4% UCare $33.9$1,742.51.9% All HMOs $233.76,971.73.4% Minnesota products only. Source: MDH Health Economics Program analysis of HMO annual reports 9

10. Minnesota HMO Net Income by Product Line, 2006 to 2011 PMAP is Prepaid Medical Assistance Program; PGAMC is Prepaid General Assistance Medical Care; MSHO is Minnesota Senior Health Options; All Other includes: Medicare Supplemental, Dental and Minnesota Disability Health Options Source: MDH Health Economics Program analysis of HMO annual reports 10

11. Minnesota HMO Net Income per Member Month by Product Line, 2006 to 2011 PMAP is Prepaid Medical Assistance Program; PGAMC is Prepaid General Assistance Medical Care; MSHO is Minnesota Senior Health Options; and MDHO is Minnesota Disability Health Options Source: MDH Health Economics Program analysis of HMO annual reports 11

12. Minnesota HMO Net Income by Product Line, 2011 PMAP is Prepaid Medical Assistance Program; MSHO is Minnesota Senior Health Options; MDHO is Minnesota Disability Health Options; SNBC is Special Needs Basic Care; All Other includes: Medicare Supplemental, and Dental Source: MDH Health Economics Program analysis of HMO annual reports 12

13. Minnesota HMO Net Income per Member Month by Product Line, 2011 PMAP is Prepaid Medical Assistance Program; MSHO is Minnesota Senior Health Options; MDHO is Minnesota Disability Health Options; SNBC is Special Needs Basic Care; All Other includes: Medicare Supplemental, and Dental Source: MDH Health Economics Program analysis of HMO annual reports 13

14. Minnesota HMO Profitability by Product Line, 2006 to 2011 PMAP is Prepaid Medical Assistance Program; MSHO is Minnesota Senior Health Options; MDHO is Minnesota Disability Health Options; SNBC is Special Needs Basic Care; All Other includes: Medicare Supplemental, and Dental Source: MDH Health Economics Program analysis of HMO annual reports 14

15. Sources of HMO Net Income, 2006 to 2011 200620072008200920102011 Sources of Net Income: Net underwriting gain/loss($43.8)$26.8$31.3$123.1 $181.4$161.7 Investment Income$78.9$93.3($5.5)$52.4 $69.4$44.5 Other($1.9)$1.2$0.2$0.0 ($0.2)27.5 Net Income$33.2$121.2$26.0$175.5 $250.6$233.7 Investment income as % of net income237.6%77.0%-21.2%29.8% 27.7%19.1% Minnesota products only Source: MDH Health Economics Program analysis of HMO annual reports In Millions of Dollars 15

16. Investment Income as a Percent of Net Income by HMO, 2011 Investment Income (millions) Net Income (millions) Investment Income as Pct of Net Income Blue Plus $15.4$50.630.5% Group Health $7.1$27.026.3% HealthPartners $2.6$94.52.8% Medica $10.6$17.959.2% Metropolitan $0.6$8.67.1% PreferredOne $0.7$1.258.1% Sanford $0.0 3.9% UCare $7.5$33.922.1% All HMOs $44.5$233.719.1% Source: MDH Health Economics Program analysis of HMO annual reports 16

17. Reserves, Medical Expenses, and Regulatory Minimum Level by HMO, 2011 Reserves (millions) Total Expenses (millions) Reserves as % of Total Expenses Reserves as % of Regulatory Level Blue Plus$357.2$953.2 37.5%924% Group Health*$98.7$378.8 26.1%565% HealthPartners*$616.9$1,137.7 54.2%385% Medica$416.3$1,145.6 36.3%754% Metropolitan$19.0$131.7 9.2%284% PreferredOne$10.6$90.5 9.9%252% Sanford$1.3$2.8 58.1%394% UCare$321.9$1,578.5 21.4%524% All HMOs$1,842.0$5,418.7 34.0%626% *Fee-for-service revenue earned was subtracted from expenses to approximate member only expenses. Regulatory level is the authorized control level; total expenses is from line 16 of HMO Minnesota Supplement Report #1. Minnesota products only. Source: MDH Health Economics Program analysis of HMO annual reports 17

18. Total Minnesota HMO Reserves Relative to Regulatory Minimum Levels, 2001 to 2011 18 Fee-for-service revenue earned was subtracted from expenses to approximate member only expenses. Regulatory minimum level is the authorized control level. Source: MDH Health Economics Program analysis of HMO annual reports

19. HEALTH PLAN MEDICAL LOSS RATIOS

20. Medical Loss Ratio in the Individual Market, 2011 (Carriers with $2 million or more in Premium Revenue) Claims Expense MLR 2 Net Premium 1 Incurred Claims Quality Improvement FraudTotal BCBSM438,117,129386,071,7891,470,85033,979387,576,61888.5% Medica IC69,743,15056,419,7792,983,883059,403,66285.2% Time IC46,758,83134,341,701199,60435,62434,576,92973.9% HealthPartners IC39,204,00032,697,000307,000033,004,00084.2% HealthPartners Inc.23,670,00023,610,000236,000023,846,000100.7% PreferredOne IC9,769,7956,712,705107,06617,7906,837,56170.0% Medica Health Plans7,817,9297,006,7681,82407,008,59289.6% American Family Mutual Ins. Co. 7,310,8405,161,178 00 70.6% World IC4,866,5174,226,54921,55104,248,10087.3% John Alden LIC3,333,7723,020,42212,2074,4153,037,04491.1% Total643,281,123554,106,7135,339,98591,808559,538,50687.0% 20 Source: MDH Health Economics Program analysis of data from National Association of Insurance Commissioners (NAIC), Supplementary Health Care ExhibitPart 1; Note 1: premiums exclude taxes and fees. Note 2: Beginning in 2012, federal law requires insurance companies that dont include certain small and new companies to issue rebates to consumers for an MLR under 80% in the individual market for the prior year.

21. Medical Loss Ratio in the Small Group Market, 2011 (Carriers with $2 million or more in Premium Revenue) Claims Expense MLR 2 Net Premium 1 Incurred Claims Quality Improvement FraudTotal BCBSM555,158,220470,081,2442,664,39134,791472,780,42685.2% Medica IC296,213,019252,208,085577,7820252,785,86785.3% HealthPartners Inc.292,759,000241,704,0002,413,0000244,117,00083.4% HealthPartners IC73,031,00062,191,000583,000062,774,00086.0% Federated Mutual IC52,647,51943,744,16500 83.1% PreferredOne HP46,087,48642,082,148339,36138,45842,459,96792.1% PreferredOne IC28,813,67926,248,908232,14027,49926,508,54792.0% Blue Plus19,660,30015,800,11495,7091,13915,896,96280.9% Total1,364,370,2231,154,059,6646,905,383101,8871,161,066,93485.1% 21 Source: MDH Health Economics Program analysis of data from National Association of Insurance Commissioners (NAIC), Supplementary Health Care ExhibitPart 1 ; Note 1: premiums exclude taxes and fees. Note 2: Beginning in 2012, federal law requires insurance companies that dont include certain small and new companies to issue rebates to consumers for an MLR under 80% in the small group market for the prior year.

22. Medical Loss Ratio in the Group Market, 2011 (Carriers with $2 million or more in Premium Revenue) Claims Expense MLR 2 Net Premium /1Incurred Claims Quality Improvement FraudTotal BCBSM 959,415,527 860,720,080 4,231,953 75,776 865,027,80990.2% HealthPartners IC 546,177,000 473,772,000 4,441,000 - 478,213,00087.6% HealthPartners Inc. 528,956,000 432,340,000 4,317,000 - 436,657,00082.6% Medica IC 448,766,811 387,123,055 3,916,091 - 391,039,14687.1% PreferredOne IC 66,616,171 61,201,876 534,428 55,860 61,792,16492.8% Medica Health Plans 62,750,731 52,314,731 489,621 - 52,804,35284.1% PreferredOne HP 53,911,413 48,424,151 377,534 39,912 48,841,59790.6% Blue Plus 37,872,193 33,418,644 311,596 2,303 33,732,54389.1% Guarantee Trust Life Ins Co 10,984,065 9,941,039 - - 90.5% Connecticut Gen Life Ins Co 6,104,994 3,717,581 169,931 - 3,887,51263.7% Federated Mutual IC 3,570,792 3,891,863 - - 109.0% Sanford HP 2,372,642 2,248,809 27,960 - 2,276,76996.0% Total 2,727,498,339 2,369,113,829 18,817,114 173,851 2,388,104,79487.6% 22 Source: MDH Health Economics Program analysis of data from National Association of Insurance Commissioners (NAIC), Supplementary Health Care ExhibitPart 1; Note 1: premiums exclude taxes and fees. Note 2: Beginning in 2012, federal law requires insurance companies that dont include certain small and new companies to issue rebates to consumers for an MLR under 85% in the large group market for the prior year.

23. HMO ENROLLMENT STATISTICS

24. Minnesota HMO Member Months by Product Line, 2006 to 2011 PMAP is Prepaid Medical Assistance Program; PGAMC is Prepaid General Assistance Medical Care; MSHO is Minnesota Senior Health Options; All Other includes: Medicare Supplemental, Dental and Minnesota Disability Health Options Source: MDH Health Economics Program analysis of HMO annual reports 24

25. Distribution of Minnesota HMO Enrollment by Region, 2011 NorthwestNortheast West CentralCentralSouthwestSoutheastTwin CitiesState-wide Blue Plus 15,34810,2001526937,76923,30145,80554,062201,754 Group Health 1766373444,4602931,89543,02250,827 HealthPartners 16443944228,5992,9953,708191,525227,872 Medica 1,50519,974671923,7091121,361123,312176,692 Metropolitan 11062718,99219,009 PreferredOne 2287756613,5609302,68512,79421,633 Sanford 0002880170899 Ucare 3,29012,710317623,9437,98129,466135,349215,915 All HMOs 20,71244,73626,611122,04836,49484,944579,056914,601 Source: MDH Health Economics Program analysis of HMO annual reports 25

26. Minnesota HMO Enrollment as Percent of Regional Population, 2011 NorthwestNortheast West CentralCentralSouthwestSoutheastTwin CitiesState-wide Blue Plus 9.0%3.1%6.9%5.2%8.3%6.3%1.9%3.8% Group Health 0.1%0.2% 0.6%0.1%0.3%1.5%1.0% HealthPartners 0.1% 0.2%3.9%1.1%0.5%6.6%4.3% Medica 0.9%6.1%3.0%3.2%0.0%0.2%4.3%3.3% Metropolitan 0.0% 0.7%0.4% PreferredOne 0.1%0.2%0.3%0.5%0.3%0.4% Sanford 0.0% 0.3%0.0% Ucare 1.9%3.9%1.4%3.3%2.8%4.0%4.7%4.0% All HMOs 12.2%13.7%11.9%16.7%13.0%11.7%20.1%17.1% Source: MDH Health Economics Program analysis of HMO annual reports 26

27. Minnesota HMO Enrollment as Percent of Regional Population, 2011 12.2% 13.7 % 11.9% 16.7% 13.0% 11.7% 20.1% Source: MDH Health Economics Program analysis of HMO annual reports; U.S. Census Bureau 27

28. Minnesota HMO Enrollment by Firm, 2011 Source: MDH Health Economics Program analysis of Minnesota Supplement # 1 available April 1 st of the following calendar year 28

29. Minnesota HMO Enrollment by Product Line, 2011 Source: MDH Health Economics Program analysis of Minnesota Supplement # 1 available April 1 st of the following calendar year 29

30. Total Minnesota HMO Enrollment, 2005 to 2011 Source: MDH Health Economics Program analysis of HMO annual reports 30

31. Minnesota HMO Market Penetration, 2005 to 2011 2005200620072008200920102011 Total HMO Enrollment 980,374894,429869,906864,119886,554933,616914,601 Minnesota Population 5,106,9925,147,8575,191,2675,230,5675,262,8245,310,5845,344,861 HMO Enrollment as Percent of Population, by Type of Product Commercial 9.6%8.1%7.5%6.9%6.0%5.2%4.0% Public 9.5%9.2% 9.6%10.8%12.3%13.1% All Products 19.1%17.3%16.7%16.5%16.8%17.6%17.1% Source: MDH Health Economics Program analysis of HMO annual report, U.S. Census Bureau 31

32. HMO Enrollment in Minnesota by Product Line, 2005 to 2011 2005200620072008200920102011 Commercial 492,440417,084391,717360,564318,285278,485212,905 Public Programs Medicare Advantage 39,86536,71739,98350,78863,01774,57182,944 Other Medicare 41,48569,81769,28175,18079,266124,017131,142 Prepaid Medical Assistance Program 258,482238,253245,079255,129286,744305,578367,290 Prepaid General Assistance Medical Care 25,19720,72714,81916,21219,40600 MinnesotaCare 122,905111,830109,027106,246119,836150,965120,320 Public Programs, Total 487,934477,345478,189503,555568,269655,131701,696 All Products 980,374894,429869,906864,119886,554933,616914,601 Source: MDH Health Economics Program analysis of HMO annual reports 32

33. Rates of Enrollment Growth for Minnesota HMOs by Product Line, 2006 to 2011 20062007200820092010 Commercial-15.3%-6.1%-8.0%-11.7%-12.5%-23.5% Public Programs Medicare Advantage -7.9%8.9%27.0%24.1%18.3%11.2% Other Medicare 68.3%-0.8%8.5%5.4%56.5%5.7% Prepaid Medical Assistance Program -7.8%2.9%4.1%12.4%6.6%20.2% Prepaid General Assistance Medical Care -17.7%-28.5%9.4%19.7%-100.0% MinnesotaCare -9.0%-2.5%-2.6%12.8%26.0%-20.3% Public Programs, Total -2.2%0.2%5.3%12.9%15.3%7.1% All Products-8.8%-2.7%-0.7%2.6%5.3%-2.0% Source: MDH Health Economics Program analysis of HMO annual reports 33

34. HMO Enrollment in Minnesota by Firm, 2005 to 2011 2005200620072008200920102011 Blue Plus157,841151,751136,204132,279136,210 176,357 201,754 FirstPlan10,14010,34715,57316,05711,130 00 Group Health34,63626,04723,98621,63451,334 48,626 50,827 HealthPartners331,564334,938320,734328,621286,953 265,930 227,872 Medica263,377183,884179,045157,957171,445 192,087 176,692 MHP17,84316,94117,86121,62418,662 18,112 19,009 PreferredOne46,21248,18750,02246,30137,596 37,440 21,633 Sanford594459419521965 813 899 UCare118,167121,875126,062139,125172,259 194,251 215,915 All HMOs980,374894,429869,906864,119886,554 933,616 914,601 Change from previous year -10.3%-8.8%-2.7%-0.7%2.6%5.3%-2.0% Source: MDH Health Economics Program analysis of HMO annual reports 34

35. Commercial Enrollment in Minnesota HMOs, 2005 to 2011 2005200620072008200920102011 Blue Plus40,63842,64932,26826,28916,302 11,114 9,661 FirstPlan1,2551,2851,8101,580618 0 0 Group Health24,35423,17222,21016,08815,030 11,121 10,151 HealthPartners253,394250,881234,995245,219226,436 201,758 157,709 Medica126,00550,47250,02424,61521,620 16,585 13,160 MHP00000 0 0 PreferredOne46,21248,18750,02246,30137,596 37,440 21,633 Sanford582438388472683 467 591 UCare00000 0 0 All HMOs492,440417,084391,717360,564318,285 278,485 212,905 -18.8%-15.3%-6.1%-8.0%-11.7%-12.5%-23.5% Source: MDH Health Economics Program analysis of HMO annual reports 35

36. Medicare Advantage Enrollment in Minnesota HMOs, 2005 to 2011 2005200620072008200920102011 Blue Plus000000 0 FirstPlan000000 0 Group Health10,2822,8751,7761,54900 0 HealthPartners0000839503 16 Medica00000 0 0 MHP0151,0184,567218 46 0 PreferredOne00000 0 0 Sanford00000 0 308 UCare29,58333,82737,18944,67261,960 74,022 82,620 All HMOs39,86536,71739,98350,78863,017 74,571 82,944 Change from previous year -1.0%-7.9%8.9%27.0%24.1%18.3%11.2% Source: MDH Health Economics Program analysis of HMO annual reports 36

37. Other Medicare Enrollment in Minnesota HMOs, 2005 to 2011 2005200620072008200920102011 Blue Plus2,21712,0609,52010,88510,934 40,406 62,704 FirstPlan2058381,0771,1601,263 0 0 Group Health0003,99736,304 37,505 40,676 HealthPartners26,64135,57437,18635,0494,424 4,611 4,604 Medica7,03911,62911,19413,13714,341 30,462 12,562 MHP3789318368241,015 1,161 1,286 PreferredOne00000 0 0 Sanford12213149282 346 0 UCare4,9938,7649,43710,07910,703 9,526 9,310 All HMOs41,48569,81769,28175,18079,266 124,017 131,142 Change from previous year 3.5%68.3%-0.8%8.5%5.4%56.5%5.7% *Other Medicare includes Medicare Cost, Minnesota Senior Health Options, Minnesota Disability Health Options MN Senior Care Plus, and Special Needs Basic Care Source: MDH Health Economics Program analysis of HMO annual reports 37

38. Prepaid Medical Assistance Program Enrollment in Minnesota HMOs, 2005 to 2011 2005200620072008200920102011 Blue Plus56,79248,24249,87352,16261,445 66,983 82,200 FirstPlan4,2574,3387,0557,6925,334 0 0 Group Health00000 0 0 HealthPartners33,52030,61631,65332,28236,325 38,933 49,508 Medica92,34386,61885,89187,68097,039 103,288 117,697 MHP13,33312,20912,56712,85113,537 14,176 16,207 PreferredOne00000 0 0 Sanford00000 0 0 UCare58,23756,23058,04062,46273,064 82,198 101,678 All HMOs258,482238,253245,079255,129286,744 305,578 367,290 Change from previous year 3.2%-7.8%2.9%4.1%12.4%6.6%20.2% Source: MDH Health Economics Program Analysis of HMO Annual Report 38

39. Prepaid General Assistance Medical Care Enrollment in Minnesota HMOs, 2005 to 2011 2005200620072008200920102011 Blue Plus4,2732,9921,8161,9622,36500 FirstPlan70157274975549800 Group Health0000000 HealthPartners4,2313,7372,7183,0203,73800 Medica8,4787,0814,8865,2406,34200 MHP2,2872,0041,4841,5241,69000 PreferredOne0000000 Sanford0000000 UCare5,2274,3413,1663,7114,77300 All HMOs25,19720,72714,81916,21219,40600 Change from previous year 8.1%-17.7%-28.5%9.4%19.7%-100.00% Source: MDH Health Economics Program analysis of HMO annual reports 39

40. MinnesotaCare Enrollment in Minnesota HMOs, 2005 to 2011 2005200620072008200920102011 Blue Plus53,92145,80842,72740,98145,164 57,854 47,189 FirstPlan3,7223,3144,8824,8703,417 0 0 Group Health00000 0 0 HealthPartners13,77814,13014,18213,05115,191 20,125 16,035 Medica29,51228,08327,05027,28532,103 41,752 33,273 MHP1,8451,7821,9561,8582,202 2,729 1,516 PreferredOne00000 0 0 Sanford00000 0 0 UCare20,12718,71318,23018,20121,759 28,505 22,307 All HMOs 122,905111,830109,027106,246 119,836 150,965 120,320 Change from previous year -7.2%-9.0%-2.5%-2.6% 12.8%26.0%-20.3% Source: MDH Health Economics Program analysis of HMO annual reports 40

41. Minnesota HMO Enrollment* by Firm and Age, 2011 <1515-2930-4445-5455-6465+Total Blue Plus20.5%20.1%17.2%15.9%14.3%21.2%19.1% Group Health0.4%0.8%0.9%2.8%8.3%20.1%5.4% HealthPartners26.8%33.9%42.8%47.9%48.9%3.9%29.8% Medica26.0%21.2%19.2%15.5%11.9%8.8%18.5% MHP3.5%2.2%1.4%1.0%0.7%0.8%2.0% PreferredOne3.1%5.2%6.8%8.1%7.0%0.2%4.3% Sanford0.0%0.1% 0.2%0.1% UCare19.7%16.6%11.5%8.7% 44.8%21.0% All HMOs100.0% *Includes health plan members that are non-Minnesota residents. Source: MDH Health Economics Program analysis of HMO annual reports. 41

42. Distribution of Minnesota HMO Enrollment* by Product Line and Age, 2011 <1515-2930-4445-5455-6465+ Commercial19.9%20.3%22.7%19.6%15.6%1.9%100.0% Medicare Advantage0.0% 0.1%0.7%2.4%96.7%100.0% Other Medicare0.0%0.3%0.7%1.4%4.0%93.6%100.0% Prepaid Medical Assistance Program (PMAP) 58.1%24.1%12.7%2.7%0.4%2.1%100.0% MNCare20.3%28.3%21.6%17.9%11.8%0.1%100.0% Total28.1%18.5%14.6%10.0%7.5%21.2%100.0% *Includes health plan members that are non-Minnesota residents. Source: MDH Health Economics Program analysis of HMO annual reports 42

43. Additional Information from the Health Economics Program Available Online Health Economics Program Home Page www.health.state.mn.us/divs/hpsc/hep/index.html Publications www.health.state.mn.us/divs/hpsc/hep/publications/yearly/2010.html Health Care Market Statistics (Presentation Slide Decks) www.health.state.mn.us/divs/hpsc/hep/chartbook/index.html Interactive Health Insurance Statistics https://pqc.health.state.mn.us/mnha/Welcome.action 43