California Individual DMHC Rate/Benefit Action Effective May 1, 2011

Rate and benefit filings have been closed by the DMHC with no objection

Rate Changes Effective 5/1/11

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for DMHC Plans Sold Prior to 9/23/10 (grandfathered and non-grandfathered)

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Background and Overview

• 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.

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Grandfathered (GF) Plans (Sold On Or Before 3/23/10)

The following DMHC

GF

plans will be subject to a rate increase on 05/01/11:

Plan Name

PPO Share 7500 PPO Share 5000 PPO Share 3500 PPO Share 3500-R PPO Share 2500 PPO Share 1500 PPO Share 1000 PPO Share 500 HMO Saver 100% HMO Select HMO

GF Contract Code

00Y4 01LC 00Y3 01LA 7891, 1871 7889, 7890 1393, 1503, 7878 7895, 1501, 1575, 1920,7888, 7904 7896, 7879, 7894, 7905, NM03 7898, 7906, 7897, NM02, 1913 PE43 4

Non-Grandfathered (NGF) Plans Sold Between 3/24/10 & 9/22/10

The following DMHC

NGF

plans will be subject to a rate increase on 05/01/11: Plan Name PPO Share 7500 PPO Share 5000 PPO Share 3500 PPO Share 3500-R PPO Share 2500 PPO Share 1500 PPO Share 1000 PPO Share 500 HMO Saver 100% HMO Select HMO NGF Contract Code 06AW 06AX 06AV 06AH 07TU 07TU 0ADZ 0ADY 06AY 07TQ 06AZ 5

Grandfathered Vs. Non-Grandfathered Rates

•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.

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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.

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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 8

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.

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DMHC Benefit Changes-5/1

Current Benefit New Benefit Plan/Contract Code

Individual PPO Share 500

7895, 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 Individual PPO Share 1000

1393, 1503, 7878, 0ADZ Prescription Drug Deductible:

$250

Brand Prescription Drug Copay:

$30

Participating and Non-Participating Provider Deductible:

$1000

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$5000

Prescription Drug Deductible:

$275

Brand Prescription Drug Copay:

$35

Participating and Non-Participating Provider Deductible:

$1150

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$5850

Prescription Drug Deductible:

$250

Brand Prescription Drug Copay:

$30

Prescription Drug Deductible:

$275

Brand Prescription Drug Copay:

$35

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DMHC Benefit Changes-5/1

Current Benefit

Plan/Contract Code

Individual PPO Share 1500

7889, 7890, 07TV

Individual PPO Share 2500

7891, 1871, 07TU Participating and Non-Participating Provider Deductible:

$1500

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$6000

Prescription Drug Deductible:

$250

Brand Prescription Drug Copay:

$30

Participating and Non-Participating Provider Deductible:

$2500

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$7500

Office Visit Copay

$35

Prescription Drug Deductible:

$500

Brand Prescription Drug Copay:

$30 New Benefit

Participating and Non-Participating Provider Deductible:

$1750

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$7050

Prescription Drug Deductible:

$275

Brand Prescription Drug Copay:

$35

Participating and Non-Participating Provider Deductible:

$2950

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$8850

Office Visit Copay

$40

Prescription Drug Deductible:

$575

Brand Prescription Drug Copay:

$35

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DMHC Benefit Changes-5/1

Plan/Contract Code

Individual PPO Share 3500

00Y3, 06AV

Individual PPO Share 3500-R

01LA, 06AH

Current Benefit

Participating and Non-Participating Provider Deductible:

$3500

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$7500

Office Visit Copay

$40

Prescription Drug Deductible:

$750

Brand Prescription Drug Copay:

$15 (or 40%, whichever is greater)

Participating and Non-Participating Provider Deductible:

$3500

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$7500

Office Visit Copay

$40

Prescription Drug Deductible:

$750

Brand Prescription Drug Copay:

$15 (or 40%, whichever is greater) New Benefit

Participating and Non-Participating Provider Deductible:

$4100

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$8800

Office Visit Copay

$45

Prescription Drug Deductible:

$875

Brand Prescription Drug Copay:

$20 (or 40%, whichever is greater)

Participating and Non-Participating Provider Deductible:

$4100

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$8800

Office Visit Copay

$45

Prescription Drug Deductible:

$875

Brand Prescription Drug Copay:

$20 (or 40%, whichever is greater)

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DMHC Benefit Changes-5/1

Plan/Contract Code

Individual PPO Share 5000

01LC, 06AX

Individual PPO Share 7500

00Y4, 06AW

Current Benefit

Participating and Non-Participating Provider Deductible:

$5000

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$7500

Office Visit Copay

$40

Prescription Drug Deductible:

$750

Brand Prescription Drug Copay:

$15 (or 40%, whichever is greater)

Participating and Non-Participating Provider Deductible:

$7500

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$7500

Office Visit Copay

$40

Prescription Drug Deductible:

$750

Brand Prescription Drug Copay:

$15 (or 40%, whichever is greater) New Benefit

Participating and Non-Participating Provider Deductible:

$5900

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$8850

Office Visit Copay

$45

Prescription Drug Deductible:

$875

Brand Prescription Drug Copay:

$20 (or 40%, whichever is greater)

Participating and Non-Participating Provider Deductible:

$8850

Participating and Non-Participating Provider Copayment/Coinsurance Maximum:

$8850

Office Visit Copay

$45

Prescription Drug Deductible:

$875

Brand Prescription Drug Copay:

$20 (or 40%, whichever is greater)

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DMHC Benefit Changes-5/1

Plan/Contract Code

Current Benefit

Copayment/Coinsurance Maximum:

$3000 New Benefit

Copayment/Coinsurance Maximum:

$3500 Individual HMO

7898, 7906, 7897, NM02, 1913, 07TQ

Individual Select HMO

PE43, 06AZ Office Visit Copay

$10

Prescription Drug Deductible:

$250

Brand Prescription Drug Copay:

$30

Copayment/Coinsurance Maximum:

$3000

Office Visit Copay

$25

Prescription Drug Deductible:

$250

Brand Prescription Drug Copay:

$30

Office Visit Copay

$15

Prescription Drug Deductible:

$275

Brand Prescription Drug Copay:

$35

Copayment/Coinsurance Maximum:

$3500

Office Visit Copay

$30

Prescription Drug Deductible:

$275

Brand Prescription Drug Copay:

$35

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DMHC Benefit Changes-5/1

Plan/Contract Code

Current Benefit

Deductible:

$1500 New Benefit

Deductible:

$1750

Copayment/Coinsurance Maximum:

$3000

Copayment/Coinsurance Maximum:

$3500 Individual HMO Saver

7896, 7879, 7894, 7905, NM03, 06AY Office Visit Copay

$10

Prescription Drug Deductible:

$250

Brand Prescription Drug Copay:

$30

Office Visit Copay

$15

Prescription Drug Deductible:

$275

Brand Prescription Drug Copay:

$35

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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.

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Upgrades-Member Plan Change Option

Current Plan and Contract Codes Individual HMO

- 7898, 7906, 7897, NM02, 1913, 07TQ

HMO Saver-

7896, 7879, 7894, 7905, NM03, 06AY

Select HMO

- PE43, 06AZ

PPO Share 7500 PPO Share 5000 PPO Share 3500 PPO Share 3500 PPO Share 2500

- 7891, 1871, 07TU

PPO Share 1500

- 7889, 7890, 07TV

PPO Share 1000

- 00Y4, 06AW - 01LC, 06AX -R- 01LA, 06AH - 00Y3, 06AV - 1393, 1503, 7878, Z828, 0ADZ

New Plan Option

Individual HMO – 06C0 Individual HMO – 06C0 Select HMO – 06C2 HMO Saver – 06C1 Individual HMO – 06C0 Select HMO – 06C2 *PPO Share 1000 – 06BL PPO Share 3500 – 06BX PPO Share 5000 – 06BZ PPO Share 7500 – 06BY *PPO Share 1000 – 06BL PPO Share 3500 – 06BX PPO Share 5000 – 06BZ *PPO Share 1000 – 06BL PPO Share 3500 – 06BX *PPO Share 1000 – 06BL PPO Share 3500 – 06BX *PPO Share 1000 – 06BL *PPO Share 1000 – 06BL *PPO Share 1000 – 06BL 17

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.

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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.

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