CoverageFirst ® PPO The easy first step toward consumer choice plans. Now with more options for your smaller clients! April 2005 GHC /05

The Easy First Step Toward Consumer-Choice Plans  A simple solution-no complicated banking arrangements  All the benefits of a full PPO plus an up-front allowance  Motivates employees to use their benefits wisely - and to consider costs  Guides employees in becoming informed consumers of health care

A Quick Review CoverageFirst is a PPO plan that can help members save money. Members change their behavior by becoming more involved in their health spending decisions. Unique four-phase design: –Annual allowance of $500 per member promotes consumerism: member must manage allowance up-front before paying toward deductible –Annual deductible after eligible expenses total $500 –Coinsurance goes into effect after member meets the deductible –Safety net ensures 100% coverage for all eligible expenses after the member reaches the out-of-pocket maximum

CoverageFirst: How it works that applies after a member spends the allowance for the year. in which CoverageFirst pays all or most additional eligible medical expenses until the member satisfies the annual out-of- pocket maximum

CoverageFirst 100/70 plan – new options (for 2-50 case size) CurrentAdditional options Deductible $2,500$3,000/$4,000/$5,000 Copayment$25 $40 – office visit – office visit $100 – ER $50 – outpatient facility

CoverageFirst 80/60 plan – new options (for 2-50 case size) CurrentAdditional options Deductible $1,000$1,500/$2,000/$2,500/$3,000/$4,000/$5,000 Copayment$25 – $40 – office visit office visit $100 – ER $50 – outpatient facility Out-of-pocket $2,000 $3,000/$4,000 (Available with all Maximum deductible options)

Rate reduction! For groups with 2-50 employees, CoverageFirst 100/70 plan rates will be reduced by 7.5 percent  Reduced rates start with 4/1/05 effective dates  Lower rates are available on our new product options  Rate reduction helps nudge your clients toward consumer-choice plans

Humana’s Consumer Choice Continuum Today CoverageFirst New Options Benefit Allowance Fully insured fund SmartExpress Coins PPO w/ PCA Employer Funded Traditional Products PPO, HMO Consumer Choice Continuum Health Savings Account Employee Funded Introduces the concept of consumer choice Appropriate for groups at any point on the continuum Good strategy for employers: Offer CoverageFirst at a low employee premium as a dual choice strategy to encourage high participation. Consider adding “buy-up” options to encourage engagement.

Dual Choice Strategy $500$625$375 $125$250 Example Standard copayment plan 90/60 with $500 deductible With a dual choice strategy, the employer can encourage consumer engagement by contributing at the same level for both plans. Premium Employer contribution Employee contribution Example CoverageFirst 80/60 with $1,500 deductible Dual Choice

Wrap-up  CoverageFirst PPO – an easy first step for employers not ready to dive into more complicated consumer-choice plans  Broad choice of deductible and copayment options  Changes employees’ behaviors and attitudes about health care costs – spending allowance encourages planning, cost-comparing, and budgeting  For 2-50 groups, reduced rates for 100/70 plans with 4/1/05 effective dates  Great option for dual-choice strategy

Thanks for your interest in the “new and improved” CoverageFirst PPO plan! What else would you like to know about CoverageFirst?