California Individual DMHC Rate/Benefit Action Effective May 1, 2011 Rate and benefit filings have been closed by the DMHC with no objection

2 Rate Changes Effective 5/1/11 -- for DMHC Plans Sold Prior to 9/23/10 (grandfathered and non-grandfathered)

3 Rate and benefit filings with the DMHC Notification mailing 2/23/11 to DMHC members California law, SB 1163 requires 60-day notification What other mailings coincide with the rate action? March open enrollment – (Not all DMHC members get open enrollment notice – closed PPO share plans do not, which is a majority of membership). Each mailing offers clients plan options Remember, clients can only take advantage of one open enrollment or move without medical underwriting. Background and Overview

4 Plan NameGF Contract Code PPO Share Y4 PPO Share LC PPO Share Y3 PPO Share 3500-R01LA PPO Share , 1871 PPO Share , 7890 PPO Share , 1503, 7878 PPO Share , 1501, 1575, 1920,7888, 7904 HMO Saver7896, 7879, 7894, 7905, NM03 100% HMO7898, 7906, 7897, NM02, 1913 Select HMOPE43 The following DMHC GF plans will be subject to a rate increase on 05/01/11: Grandfathered (GF) Plans (Sold On Or Before 3/23/10)

5 Plan NameNGF Contract Code PPO Share AW PPO Share AX PPO Share AV PPO Share 3500-R06AH PPO Share TU PPO Share TU PPO Share 10000ADZ PPO Share 5000ADY HMO Saver06AY 100% HMO07TQ Select HMO06AZ The following DMHC NGF plans will be subject to a rate increase on 05/01/11: Non-Grandfathered (NGF) Plans Sold Between 3/24/10 & 9/22/10

6 DMHC NGF standard rates are 3-4% higher than GF rates on average NGF base rates are higher than GF base rates because they reflect the Federal Health Care Reform benefit levels NGF plans must cover Preventive Care benefits at 100%. Member has no cost share. No annual dollar limits on essential health benefits. Children are expected to be guaranteed issue for the NGF plans under Health Care Reform. Grandfathered Vs. Non-Grandfathered Rates

7 When Do DMHC Members Rates/Benefits Change? Rate Changes apply to DMHC Members who are: Not in an initial 12-month rate guarantee Have not received a rate increase in the last 6 months The majority of members (nearly 95%) will receive the rate adjustment on 5/1/11.

8 Dental Rate Increase Dental rate increase effective 05/01/11 on following plans (contract codes): Dental Prudent Buyer (7874*) Dental Net (QI4V**) Dental Blue (ZE6N**, ZE7N**, ZE8N**, DZ09*, DZ10*,DZ11*,DZ12*, 01PU*, 01PW*) Note: SmileNet (Y437, 7438, 7439) rates do not change. Tonik Enhanced Dental changed 1/1/11. *CDI **DMHC

9 Benefit Reductions Benefit changes, to help moderate the rate increase, effective 05/01/11 will: Increase Medical Deductibles Increase Brand/Specialty Co-pays Increase Brand/Specialty Deductibles Increase Coinsurance Maximum Increase Office Visit Co-Pays Please note: All members on impacted DMHC plans will receive their benefit changes effective 5/1 regardless of their renewal month. Member ID cards and endorsements will go out in a separate, future mailing. Plan names will stay the same, even though deductible levels may change.

10 DMHC Benefit Changes-5/1 Plan/Contract Code Current BenefitNew Benefit Individual PPO Share , 1501, 1575, 1920, 7888, 7904, 0ADY Participating and Non-Participating Provider Deductible: $500 Participating and Non-Participating Provider Deductible: $550 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $5000 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $5850 Prescription Drug Deductible: $250 Prescription Drug Deductible: $275 Brand Prescription Drug Copay: $30 Brand Prescription Drug Copay: $35 Individual PPO Share , 1503, 7878, 0ADZ Participating and Non-Participating Provider Deductible: $1000 Participating and Non-Participating Provider Deductible: $1150 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $5000 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $5850 Prescription Drug Deductible: $250 Prescription Drug Deductible: $275 Brand Prescription Drug Copay: $30 Brand Prescription Drug Copay: $35

11 Plan/Contract Code Current BenefitNew Benefit Individual PPO Share , 7890, 07TV Participating and Non-Participating Provider Deductible: $1500 Participating and Non-Participating Provider Deductible: $1750 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $6000 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $7050 Prescription Drug Deductible: $250 Prescription Drug Deductible: $275 Brand Prescription Drug Copay: $30 Brand Prescription Drug Copay: $35 Individual PPO Share , 1871, 07TU Participating and Non-Participating Provider Deductible: $2500 Participating and Non-Participating Provider Deductible: $2950 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $7500 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $8850 Office Visit Copay $35 Office Visit Copay $40 Prescription Drug Deductible: $500 Prescription Drug Deductible: $575 Brand Prescription Drug Copay: $30 Brand Prescription Drug Copay: $35 DMHC Benefit Changes-5/1

12 DMHC Benefit Changes-5/1 Plan/Contract Code Current BenefitNew Benefit Individual PPO Share Y3, 06AV Participating and Non-Participating Provider Deductible: $3500 Participating and Non-Participating Provider Deductible: $4100 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $7500 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $8800 Office Visit Copay $40 Office Visit Copay $45 Prescription Drug Deductible: $750 Prescription Drug Deductible: $875 Brand Prescription Drug Copay: $15 (or 40%, whichever is greater) Brand Prescription Drug Copay: $20 (or 40%, whichever is greater) Individual PPO Share 3500-R 01LA, 06AH Participating and Non-Participating Provider Deductible: $3500 Participating and Non-Participating Provider Deductible: $4100 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $7500 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $8800 Office Visit Copay $40 Office Visit Copay $45 Prescription Drug Deductible: $750 Prescription Drug Deductible: $875 Brand Prescription Drug Copay: $15 (or 40%, whichever is greater) Brand Prescription Drug Copay: $20 (or 40%, whichever is greater)

13 DMHC Benefit Changes-5/1 Plan/Contract Code Current BenefitNew Benefit Individual PPO Share LC, 06AX Participating and Non-Participating Provider Deductible: $5000 Participating and Non-Participating Provider Deductible: $5900 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $7500 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $8850 Office Visit Copay $40 Office Visit Copay $45 Prescription Drug Deductible: $750 Prescription Drug Deductible: $875 Brand Prescription Drug Copay: $15 (or 40%, whichever is greater) Brand Prescription Drug Copay: $20 (or 40%, whichever is greater) Individual PPO Share Y4, 06AW Participating and Non-Participating Provider Deductible: $7500 Participating and Non-Participating Provider Deductible: $8850 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $7500 Participating and Non-Participating Provider Copayment/Coinsurance Maximum: $8850 Office Visit Copay $40 Office Visit Copay $45 Prescription Drug Deductible: $750 Prescription Drug Deductible: $875 Brand Prescription Drug Copay: $15 (or 40%, whichever is greater) Brand Prescription Drug Copay: $20 (or 40%, whichever is greater)

14 DMHC Benefit Changes-5/1 Plan/Contract Code Current BenefitNew Benefit Individual HMO 7898, 7906, 7897, NM02, 1913, 07TQ Copayment/Coinsurance Maximum: $3000 Copayment/Coinsurance Maximum: $3500 Office Visit Copay $10 Office Visit Copay $15 Prescription Drug Deductible: $250 Prescription Drug Deductible: $275 Brand Prescription Drug Copay: $30 Brand Prescription Drug Copay: $35 Individual Select HMO PE43, 06AZ Copayment/Coinsurance Maximum: $3000 Copayment/Coinsurance Maximum: $3500 Office Visit Copay $25 Office Visit Copay $30 Prescription Drug Deductible: $250 Prescription Drug Deductible: $275 Brand Prescription Drug Copay: $30 Brand Prescription Drug Copay: $35

15 DMHC Benefit Changes-5/1 Plan/Contract Code Current BenefitNew Benefit Individual HMO Saver 7896, 7879, 7894, 7905, NM03, 06AY Deductible: $1500 Deductible: $1750 Copayment/Coinsurance Maximum: $3000 Copayment/Coinsurance Maximum: $3500 Office Visit Copay $10 Office Visit Copay $15 Prescription Drug Deductible: $250 Prescription Drug Deductible: $275 Brand Prescription Drug Copay: $30 Brand Prescription Drug Copay: $35

16 Upgrades-Member Plan Change Option Plan Movement Options For Members Who Receive Benefit Changes Members can upgrade to an open plan available for sale: within their plan family, if available without medical underwriting through April 30. their current plan must be paid to May 1, 2011 change form must be received on or before April 30, 2011* new plan effective May 1, 2011 If a member takes advantage of another opportunity to change plans (see Open Enrollment March 1-March 30 slide deck), this upgrade option will no longer be available. (This open enrollment option does not apply to the majority of DMHC membership) Members will also have the opportunity to move to other open plans as is normally the case, per Plan Option tables. *Change form will include a grid of their options. To assist them with rates on plan options, use PlanFinder or your quoting site, keeping in mind their rate may be higher if they have an underwriting tier other than Level 1.

17 Upgrades-Member Plan Change Option Current Plan and Contract CodesNew Plan Option Individual HMO- 7898, 7906, 7897, NM02, 1913, 07TQ Individual HMO – 06C0 HMO Saver- 7896, 7879, 7894, 7905, NM03, 06AYIndividual HMO – 06C0 Select HMO – 06C2 HMO Saver – 06C1 Select HMO- PE43, 06AZIndividual HMO – 06C0 Select HMO – 06C2 PPO Share Y4, 06AW*PPO Share 1000 – 06BL PPO Share 3500 – 06BX PPO Share 5000 – 06BZ PPO Share 7500 – 06BY PPO Share LC, 06AX*PPO Share 1000 – 06BL PPO Share 3500 – 06BX PPO Share 5000 – 06BZ PPO Share 3500-R- 01LA, 06AH*PPO Share 1000 – 06BL PPO Share 3500 – 06BX PPO Share Y3, 06AV*PPO Share 1000 – 06BL PPO Share 3500 – 06BX PPO Share , 1871, 07TU*PPO Share 1000 – 06BL PPO Share , 7890, 07TV*PPO Share 1000 – 06BL PPO Share , 1503, 7878, Z828, 0ADZ*PPO Share 1000 – 06BL

18 Agent Tools On the 5/1/2011 Rate and Benefit page on the agent site: Rate Sheets Sample member materials. Rate action client reports on Agent Services that show which clients are affected and their new medical and/or dental rates.

19 Anthem Blue Cross is the trade name of Blue Cross of California. Anthem Blue Cross and Anthem Blue Cross Life and Health Insurance Company are independent licensees of the Blue Cross Association. ® ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross names and symbols are registered marks of the Blue Cross Association.