Medicare- Parts A, B, C and D 4/12/2018 Y0114_17_30167_I 12/19/2016 | COMPANY CONFIDENTIAL | FOR INTERNAL USE ONLY | DO NOT COPY Medicare- Parts A, B, C and D Part A – Hospital Insurance Program Inpatient hospital, skilled nursing facility, home health, and hospice care Part B – Supplementary Medical Insurance Physician visits, outpatient hospital, preventive services, home health Part C – Medicare Advantage plans An alternative to Original Medicare; beneficiaries can enroll in a private plan to receive all Medicare-covered benefits and (often) extra benefits Medicare health plans which must cover Part A and Part B benefits Private plans include HMOs, PPOs, and Private Fee-for-Service plans Part D – Medicare Prescription Drug Plan Medicare has the following parts: Part A helps pay for inpatient hospital stays but also helps cover skilled nursing care, home health care, and hospice care. Part B helps cover medically-necessary services like doctors visits and outpatient care, outpatient hospital services, physician visits and lab work. Part B also covers some preventive services including mammograms and flu shots screening tests and shots, diagnostic tests, some therapies, and durable medical equipment like wheelchairs and walkers. Part C, known as Medicare Advantage, offers an alternative to fee-for-service coverage of Medicare benefits, where beneficiaries can enroll in a private plan, such as an: HMO - health maintenance organization PPO - preferred provider organization PFFS - private fee-for-service plan. These plans contract with Medicare and receive payments from the government to provide enrollees with all Medicare-covered benefits and, often, extra benefits that Medicare does not cover such as vision and dental services. The newest part of Medicare, Part D, is drug coverage that helps pay for outpatient prescription drugs.

4/12/2018 Y0114_17_30167_I 12/19/2016 | COMPANY CONFIDENTIAL | FOR INTERNAL USE ONLY | DO NOT COPY Part C Replace Medicare Parts A and B with Medicare Part C, also called Medicare Advantage. Medicare Part C: Is offered by private insurers that have been approved by Medicare Offers similar coverage to Part A (hospital) and Part B (medical), and typically offers additional benefits* Some plans may include prescription drug coverage, vision, dental, and fitness and wellness programs Part C refers to the part of the Medicare program that allows Medicare beneficiaries to receive their Medicare-covered benefits through private plans, rather than through the traditional fee-for-service program. They must provide Medicare Part A and B benefits like hospital and physician services, though cost-sharing can differ from traditional Medicare as long as the value of the benefits offered are actuarially equivalent. The majority of these plans also provide Part D drug coverage. Today, Medicare beneficiaries have the option to enroll in a number of different types of plans for their Medicare covered benefits, including HMOs, PPOs, and private fee-for service plans. Medicare Advantage plans contract with Medicare on an annual basis (new benefits each year). In general, beneficiaries have an opportunity to sign up for coverage through an MA plan once a year and may not switch plans until the next enrollment period. The plans receive payments from the government to provide benefits to enrollees. Medicare pays the plans a fixed amount per person; in exchange, the plans are responsible for the cost of providing all Medicare-covered services to enrolled beneficiaries. MA plans are at risk for the costs of providing health care to their enrollees, and therefore have a financial incentive to manage patient care and provide services efficiently. The federal government is now paying more for people who enroll in Medicare Advantage plans – 14 percent more on average – than it would pay for the same individuals if they were covered under Original Medicare. These so-called “overpayments” allow plans to provide extra benefits to the minority of beneficiaries who are enrolled in private plans, but increases costs to the federal government, at a time when the program is facing fiscal challenges. Enrollment in Medicare Advantage is on the rise and is exceeding insurance company expectations. From 2010 to 2011, enrollment in Medicare Advantage increased by 6%. Nearly 12.2 million people were enrolled in Medicare Advantage (MA) plans as of February 2011, roughly 26% of the 46.4 million people eligible for Medicare, according to data from The Centers for Medicare and Medicaid Services (CMS). * Some of these additional benefits may require an additional fee.

Original Medicare NO LIMIT on out-of-pocket spending 4/12/2018 Y0114_17_30167_I 12/19/2016 | COMPANY CONFIDENTIAL | FOR INTERNAL USE ONLY | DO NOT COPY Original Medicare NO LIMIT on out-of-pocket spending Medicare offers important coverage, but with high cost-sharing and benefit gaps. Similar to Swiss cheese that has holes in it, there are holes in original Medicare that keep you from being fully covered. Does not cover all medical benefits Very limited long-term care coverage No dental, hearing aids or eyeglasses Has relatively high cost-sharing requirements Deductibles for Part A, Part B and Part D Coinsurance/copayments Part D coverage gap (“doughnut hole”) No limit on out-of-pocket spending Unlike typical plans offered by large employer Pays about half of beneficiaries’ total health and long-term care spending The Original Medicare Plan was never designed to cover everything and to this day, Medicare still has significant gaps in coverage and relatively high cost-sharing requirements, which requires beneficiaries to absorb relatively high out-of-pocket costs. While Medicare provides basic benefits, it does not pay for long-term care. Medicare has a limited skilled nursing facility benefit of up to 100 days and home health benefits, but does not pay for ongoing care for people with long-term care needs, either in nursing homes, assisted living facilities or at home. Medicare does not pay for dental care, which can be quite expensive, and does not cover hearing aids or eyeglasses. Further, Medicare has relatively high cost-sharing requirements WHEN THE DEDUCTIBLES AND OTHER COST SHARING ARE CONSIDERED. And unlike typical large employer plans, Medicare’s drug benefit has a coverage gap and Medicare does not have a cap on catastrophic out-of-pocket expenses for covered benefits. Thus most beneficiaries NEED AND have some sort of supplemental coverage to help fill in the gaps and cover cost-sharing requirements. We’ll review other plan options later in the presentation. High cost-sharing requirements Does not cover all medical benefits

Medicare Advantage Guidelines 4/12/2018 Y0114_17_30167_I 12/19/2016 | COMPANY CONFIDENTIAL | FOR INTERNAL USE ONLY | DO NOT COPY Medicare Advantage Guidelines Still in Medicare program Get all Part A and Part B services Usually get all Part A and B services through plan May have to use the plan’s providers May get extra benefits Vision, hearing, dental services Prescription drug coverage Eligibility Live in plan’s service area Have Medicare Part A and Part B Continue to pay Part B premium Plan premium may be applicable Doesn’t have ESRD at time of enrollment Let’s talk more about how Medicare Advantage Plans work. In most Medicare Advantage Plans, Medicare-covered health care are covered through that plan. It’s important to know that if you join a Medicare Advantage Plan, you Are still in the Medicare program Still get all your regular Part A and Part B services Still have Medicare rights and protections The plan may offer extra benefits like prescription drug coverage and coverage for vision, hearing, dental and/or health and wellness programs. You may have to see doctors that belong to the plan or go to certain hospitals to get services. You will have to pay other costs (such as copayments or coinsurance) for the services you get. These costs may be different from those in Original Medicare. Most people with Medicare can choose to join a Medicare Advantage Plan. To be eligible to join a Medicare Advantage Plan, you must meet the following conditions: Live in the area served by the plan Have Medicare Part A and Part B Can not have ESRD - If you have End-Stage Renal Disease (ESRD), you usually can’t join a Medicare Advantage Plan. However, there are some exceptions, such as if you are already in a plan and then develop ESRD. Also must: Continue to pay the monthly Medicare Part B premium. However, some plans may offer an extra benefit by paying some of your Medicare Part B premium. And pay an extra monthly premium to the plan (if the plan has one)

Part C – Medicare Advantage 4/12/2018 Y0114_17_30246_I 12/19/2016 | COMPANY CONFIDENTIAL | FOR INTERNAL USE ONLY | DO NOT COPY Part C – Medicare Advantage MA Eligibility Requirements: Entitled to Part A and enrolled in Part B Reside in the MA plan’s service area Does not have End Stage Renal Disease (unless individual is an existing commercial plan member)* Enroll during required time frames *Individuals who develop ESRD while enrolled in a health plan (e.g., a commercial or group health plan, or a Medicaid plan) offered by the MA organization, are eligible to enroll during ICEP in an MA plan offered by that organization

Part C Medicare Advantage The Medicare Advantage (MA) Program combines coverage for Parts A & B benefits and is administered by private health plans. Private health plans contract with CMS to administer benefits on behalf of CMS. Medicare pays a fixed amount for the beneficiary’s care every month to the companies offering MA Plans.

Part C Medicare Advantage MA Plans structure original Medicare benefits to function like an HMO or PPO. MA plans are required to offer at least one option with integrated prescription drug benefits. At a minimum, plans must cover all services covered under Medicare, but can also provide extra benefits not covered by traditional Medicare: Routine vision and hearing exams Fitness benefits Dental benefits

Medicare Advantage Plan Types 4/12/2018 Y0114_17_30167_I 12/19/2016 | COMPANY CONFIDENTIAL | FOR INTERNAL USE ONLY | DO NOT COPY Medicare Advantage Plan Types Health Maintenance Organization (HMO) Preferred Provider Organization (PPO) Private Fee-for-Service (PFFS) Special Needs Medicare Medical Savings Account (HSA) There are other ways to get your Medicare benefits. You can choose to join a Medicare Advantage Plan or some other Medicare plan. There are five types of Medicare Advantage Plans: HMOs - Most beneficiaries who are in MA plans are in HMOs, the longest standing private plans in Medicare. HMOs are typically the most tightly managed plans with a defined network of providers that beneficiaries must generally use to receive care. PPOs - PPOs are also network-based managed care plans, though PPO enrollees may see providers outside the plan’s network for higher costs. Private FFS Plans - PFFS plans experienced rapid growth in recent years. You can go to any Medicare-approved doctor or hospital that accepts the plan payment terms for covered services. The private company decides how much it will pay and how much you pay for services. Special Needs Plans—Only some groups of people can join a Special Needs Plan, including people in some long-term care facilities (like a nursing home); people who have both Medicare and Medicaid; and people who have certain chronic or disabling conditions. Special Needs Plans are only available in limited areas. Medicare Medical Savings Account Plans—These plans have two parts. One part is a Medicare Advantage Plan with a high deductible, and one part is a Medical Savings Account into which Medicare deposits money you can use to pay health care costs. MA plans vary widely in the way they operate and the requirements that apply to different types. These differences may not be readily apparent to prospective enrollees, but may have implications for their access to providers, their access to drug benefits, and to what they pay for their care.