Employee Wellness Solutions Kevin J. Klobucar President and CEO Blue Care Network of Michigan

Introduction Rising health care costs and the fact that only about three percent of U.S. health care expenditures are for prevention and wellness while 97 percent is spent on acute and chronic illnesses indicated a need to develop a wellness based product that incorporated a partnered accountability approach This need was supported by national polls that showed that U.S. adults thought that it was fair to ask people with unhealthy lifestyles to pay higher out-of-pocket costs The approach that the Blues came up with aligned wellness with financial incentives and included the following elements: Member accountability to follow a healthy lifestyle Employer commitment to wellness Primary care physician cooperation and support Health plan tools and support Healthy Blue Living℠, introduced in October 2006, was the first participation-based HMO health plan in Michigan to offer financial incentives to individuals for working toward healthy goals Data Sources: Centers for Disease Control; Harris Interactive Health Care Poll

Health Plan Product Solutions Healthy Blue LivingSM, the first of a family of wellness-based Blue products, has received an overwhelmingly positive response Enrollment currently stands at more than 118,000 members and 900 groups as of August 2010 52 percent of the groups represent new HMO business Employers have received premium reductions or reduced claim costs by approximately 10 percent Other wellness based products followed: Healthy Blue IncentivesSM – participation based PPO option was introduced in 2008 Healthy Blue OutcomesSM – PPO plan introduced in 2010 offers financial awards tied to member health outcomes Healthy Blue Living RewardsSM – HMO plan recently introduced expands on original participation based Healthy Blue Living with an outcome-based component The Healthy BlueSM family of products are wellness-based HMO and PPO plans from Blue Cross Blue Shield of Michigan and Blue Care Network that reward employees for making better health choices.

Healthy Blue LivingSM Product Design Overview Healthy Blue Living is structured around six health measures that focus on high-impact health areas that individuals can manage. Measures selected based on potential to impact health care costs and likelihood that an individual will develop a chronic or disabling condition Maximum benefit level with lower copays and deductibles is based on commitment to achieve wellness targets (Enhanced benefit vs. Standard benefit) Program designed to promote partnership with primary care physician in achieving improved health outcomes Health plan care management programs offered to support targeted areas Employer commitment to support healthier lifestyles through worksite wellness programs, healthier meal options and smoke-free work environments Health measure Wellness target Tobacco Non-tobacco user Weight Body mass index below 30 Blood pressure Below 140/90 Cholesterol LDL-C below target (based on risk factors: <100, <130 and <160) Blood sugar At or below target (fasting blood sugar or A1C) Depression Any depression is in full remission

Healthy Blue LivingSM Three Year Results Members in product for three years show improvement while others have opportunity Good news: 52 percent of members who agreed to stop smoking did 14 percent of members who agreed to get weight under 30 BMI did 71 percent of members who agreed to get blood pressure under control did 55 percent of members who were identified as having high cholesterol are now at an acceptable level 61 percent of members who were identified as having blood sugar issues are now at an acceptable level Concerning news: 25 percent of members who agreed to stop smoking are still smoking 75 percent of members who agreed to get their weight under control still have a BMI above 30 36 percent of members who agreed to get cholesterol to an acceptable level have not been able to 28 percent of members who agreed to get blood sugar under control have not been able to

Healthy Blue LivingSM Three Year Results Claim utilization show cost associated with risk categories Member Health Behaviors - Adults with Enhanced Benefits Only Morbidity by Risk Category - Adults Only

Healthy Blue LivingSM Three Year Results Weight Control was the area most resistant to change After three years, 74.6 percent of members who agreed to get their weight under control still have a BMI above 30 Claims costs for those with a BMI above 30 were significantly higher than members without a risk factor Prevalence of Obesity in Enhanced Group Claim Costs PMPM - No Risk vs. Weight Risk 100 200 300 400 500 600 700 20-29 30-39 40-49 50-59 60-64 Age Claims PMPM ($) 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 Percent Difference in Claim Cost No Risks Weight Percent Difference in Claim Cost (Weight) Note: Based on active HBL Members (as of January 1, 2009) with Enhanced benefits and a BMI over 30 on their most current qualification form (members with BMI’s lower than 30 were excluded)

Healthy Blue LivingSM Results Lead to Change Changes in original Healthy Blue Living Product Replaced alcohol use with depression as a health measure Require on-line Health Risk Assessment annually Require cotinine testing to determine smoking status Urine test or blood test Members with any health issue must participate in improving health for maximum benefit Previously determined based on point system Require members with a body mass index greater than or equal to 30 to participate in Weight Watchers® or Pedometer Program Creation of next generation product, Healthy Blue Living Rewards, for groups with desire to promote wellness at a higher level Outcome-based product with three tiers of benefit levels Highest tier for members with no health conditions

Complementary Program Solutions Workplace wellness toolkit for groups Information on implementation of workplace wellness programs, healthy food choices, and smoke-free workplace environments Health and wellness messages for employees (for example, paycheck stuffers, newsletters, articles to support communications , monthly health tips, posters and fliers for each month's national health observance) Support tools through BlueHealthConnection® Online Health Assessment and Digital Coaching WebMD® Healthcare AdvisorSM, quality and cost information for providers and treatment options 24/7 Nurse Line Quit the Nic Program, telephone based smoking cessation Wellness Social Networks Affinity programs to support wellness focus Healthy Blue XtrasSM offers access to savings on groceries, fitness equipment and memberships, and weight loss programs from Michigan-based vendors Blue 365® offers access to national health, wellness and fitness vendors

BCN Employee Wellness Works Program Wellness Works was created to support BCN employee efforts to live healthier lives Implemented smoke-free campus and offered free smoking cessation classes. Placed automatic blood pressure machines in all facilities. Marked indoor and outdoor walking paths at the facilities. Changed the items in the vending machines to 75 percent healthy choices and 25 percent less healthy. Decreased the price of healthy food choices by 25 percent and increased the price of the unhealthy food choices by 25 percent. Supplied employees with pedometers and health journals. Offer $300 fitness reimbursement to all full time employees. Hold onsite fitness classes Utilization Measures 2008   2009 Change Hospital Admissions 72.3/1,000  64.3/1,000 11.0% decrease ER Visits  300.2/1,000 268.4/1,000    10.9%  decrease Long Term Disability Cost per Employee    $291 $257   11.6%  decrease Healthy Blue Living Employees Agree to work on weight loss 26.7%  36.8 % 37.8% increase Cholesterol level in normal range  77.1%     81.4%  5.5% increase