National Health Access

Citizens Health Care Working Group

May 12, 2005 Presented by: Kenneth L. Sperling CIGNA HealthCare

1

Background The HR Policy Association

• Represents the senior HR leadership of Fortune 500 companies • Over 240 member companies; cross-section of American industry • Entry into health care at 2003 annual meeting; formed Health Care Policy Roundtable • Identified the uninsured as principal focus 2

Health Care Policy Roundtable

J. Randall MacDonald

IBM Corporation, Chairman, Health Care Policy Roundtable

Timothy Hughes

Cox Enterprises, Inc., Chairman, Public Policy Directions

Greg Lee

Sears Roebuck & Co., Chairman, Affordable Health Care Solutions Coalition

John Butler

Textron Inc., Chairman, Regional Health Care Quality Reform Initiatives

Sid Banwart

Caterpillar, Inc., Chairman, Direct Pharmaceutical Purchasing Coalition 3

Charter Coalition Members

ACS ALCOA Aerojet Allstate Insurance Company Amerada Hess Anheuser-Busch Avon Caterpillar Inc.

Circuit City Stores, Inc.

Cox Enterprises, Inc.

DTE Energy Company Eaton Corporation Edward D. Jones & Company, LP EMC Corporation Emerson Electric Company Episcopal Church Medical Trust Federal-Mogul Corporation FedEx Ground First Data Corporation Ford Motor Corporation FPL Group Inc.

Gap, Inc.

General Dynamics General Electric Company General Mills General Motors Hilton Hotels Honeywell The Home Depot IBM Corporation Intel International Paper Johnson Controls, Inc.

Kelly Services, Inc.

Limited Brands Lockheed Martin Corporation Maersk Manpower Incorporated Marathon Ashland Petroleum Marathon Oil Corporation Marriott McDonald's Corporation Motorola, Incorporated Parker Hannifin Corporation Payless ShoeSource, Inc.

Initial population – 1.3 million • Employees, independent contractors, pre-65 retirees • 3 million including dependents Pitney Bowes Prudential Financial Sears Roebuck & Company Sprint Standard Parking Starbucks Corporation Starwood Hotels & Resorts SYSCO Target Textron Inc.

Toys "R" Us, Inc.

United Parcel Service United Technologies Verizon Communications Verizon Wireless 4

Affordable Health Care Solutions Coalition Concept

• Address the issue of the “working uninsured” by aggregating large groups of employees not receiving a health care benefit subsidy from a broad cross-section of American industry • Create more viable individual health care market • Promote dissemination of provider efficiency and effectiveness data

Focus on uninsured populations in large corporations, specifically —

• Full-time, part-time, temps without coverage • Contract workers, independent agents, consultants • Pre-Medicare retirees 5

Affordable Health Care Solutions Coalition Goals

• Fully insured • No required direct employer subsidy • Guaranteed issue (i.e., no medical questions or underwriting) • National solution • Range of options and price points significantly better than current individual health insurance market, including comprehensive major medical coverage • Provider cost and quality transparency 6

National Health Access

Offering for Fall 2005

Level VI Level V Level IV Level III Level II Level I Major Medical —$1,100 Deductible (HSA) 1 Major Medical —$2,000 Deductible (HSA) 1 Scheduled Inpatient & Outpatient Benefits Scheduled Outpatient Benefit Wellness Benefit Discounted Network Guarantee Issue (with waiting periods) Guaranteed Issue (no waiting periods)

C a r r r r i i e r r

United —15 States Humana —16 States CIGNA —1 State United —15 States Humana —16 States CIGNA —1 State United United United United

C o n t t r r a c t t i i n g

Group Individual Individual Group Individual Individual Group Group Group

F u n d i i n g

Fully Insured Fully Insured Fully Insured Fully Insured Fully Insured Fully Insured Fully Insured Fully Insured Fully Insured Group Fully Insured 1 Depending on location, individual products may be offered that do include individual underwriting 7

States with Major Medical Offerings

OR 12,136 CA 142,854 WA 23,677 NV 7,319 HI 4,130 ID 4,024 UT 12,110 AZ 22,552 MT 2,047 WY 2,180 CO 20,285 NM 5,029 AK 1,903 VT —1,395 ND 2,715 SD 2,105 NE 7,945 KS 13,104 OK 11,450 MN 31,345 IA 9,864 MO 34,874 AR 9,344 WI 23,291 MI 46,117 NY 67,686 PA 60,155 IL 62,071 IN 34,501 OH 52,977 KY 14,241 WV 5,157 TN —26,649 VA 26,943 NC 35,898 SC 15,652 MS 10,752 AL 15,887 GA 39,087 ME 3,395 NH —4,227 MA —23,378 RI (Inc. in MA) CT —19,258 NJ —29,205 DE —3,970 DC —20,349 MD —22,994 TX 89,741 LA 15,279 FL 74,464

Plan Name

CIGNA Humana United Total Covered Total Eligible

Number of Employees

22,552 (2%) 492,936 (39%) 571,361 (46%) 1,086,849 (87%) 1,245,933

Number of States

1 16 15 32 50 Current configuration leads to Major Medical options in 32 states representing 87% of the eligible population 8

Challenges

• Adverse selection concerns on major medical coverage led to a fragmented state-by-state solution • Could not cover franchisees or small employers • Need to build front-end infrastructure for eligibility, enrollment, billing, and service • Lack of industry consensus on provider quality measurement and reporting 9