Final Award of 2017 Seal of Approval (VOTE)ASHLEY HAGUEDeputy Executive Director, Strategy and External AffairsBRIAN SCHUETZDirector of Program and Product StrategyHEATHER CLORANAssociate Director of Program and Product StrategyEDITH BOUCHER CALVAO, FSA, MAAAChief ActuaryBoard of Directors Meeting, September 8, 2016

2017 Seal of Approval OverviewThe 2017 Qualified Health and Dental Plan shelves will offer a range of plan designs, carriers and premiums. Rising premium costs, for certain medical carriers and plans, means many members

will experience high renewal increases Many unsubsidized and APTC-only enrollees, particularly those enrolled in Harvard Pilgrim HealthCare

and Neighborhood Health Plan, will see large premium increases for their renewal plans Rising premium costs will also impact ConnectorCare members enrolled in higher cost carriers. These

members will experience large increases in the contributions for their renewal plans Despite these increases, almost all of our enrollees facing steep increases can find

similar (or identical) plan options with lower costs from other carriers All of our carriers offer networks with high quality providers Many enrollees who shop will find plans with lower costs than their renewal plan and their current plan

The Health Connector will strongly encourage all members to comparison shop in order find a 2017 plan that meets their needs – including cost

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2017 Seal of Approval Timeline Today we share our recommendation for the award of the Final Seal of Approval (SOA) for

Qualified Health and Dental Plans to be offered for sale through the Health Connector for coverage starting January 1, 2017

We will also be detailing our recommendation for the 2017 ConnectorCare program

Mar2016 Apr May Jun Jul Aug Sept Oct Nov Dec

20163/10: SOA Kickoff – Board Meeting

3/18: Release Medical and Dental RFRs5/13: RFR Responses Due

7/14: Conditional SOA – Board Meeting

11/1: Open EnrollmentBegins

9/8: Final SOA – Board Meeting (TODAY)

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2017 Seal of Approval RequirementsAffordable Care Act (ACA)& Massachusetts Standards Health Connector SOA Requirements

QHPs

• Licensure and accreditation• Network adequacy• Service Area• Essential Health Benefit (EHB),

cost-sharing limits and actuarial value (AV) requirements

• Premium review• Fair marketing practice• Transparency of coverage• Quality Improvement Strategy

(QIS), Quality Reporting Standards (QRS) and QHP Enrollee Satisfaction Survey

• All other requirements necessary for Division of Insurance (DOI) approval

• Propose one Standardized plan on each metallic tier on broadest commercial network

– Option to propose one alternative network variation for each metallic tier

• Option to propose up to three Non-standardized plans in total• May request to withdraw Standardized Bronze plan if Health

Connector receives a sufficient number of Bronze options• Propose a Catastrophic plan; may request to withdraw Catastrophic

plan if Health Connector receives a sufficient number of Catastrophic options

• Propose a ConnectorCare-compatible Silver plan for the ConnectorCare program that complies with the Health Connector’s network adequacy requirements for this population

– Plans may be offered on an any network type, including a narrower network, or a network that is broader than their standard commercial network

QDPs• Must offer one plan for each Standardized plan design: Family High,

Family Low and Pediatric-only– Option to propose one alternative network variation for each

design• Option to propose up to three Non-standardized plans in total

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2017 Seal of Approval ApproachThrough the 2017 SOA, the Health Connector has worked to further simplify the consumer shopping experience by streamlining our product offerings and bolstering the ability to conduct “apples-to-apples” comparison shopping. As part of the 2017 SOA, we made several key changes to the Qualified Health Plan (QHP) and

Qualified Dental Plan (QDP) product shelves aimed at achieving these goals We eliminated the second standardized Gold plan design, standardized the Bronze tier and

standardized additional cost sharing categories Overall, we focused the number of allowable plan offerings on our QHP product shelf and instituted a

cap on the number of allowable offerings on our QDP shelf We also leveraged this year’s SOA to begin influencing the product design of plans in our

marketplace to address the health needs of our members, through pediatric dental coverage and opioid use disorder therapy; for future years, we also plan to address chronic disease management through value-based insurance design (VBID)

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1 Enrollment-weighted premium change (2016 actuals to 2017 calculated) w/ member aging (~2%), assumes mapping to 2017 renewal plan 2 Enrollment-weighted premium change from 2016 ConnectorCare selected Silver plan to 2017 selected Silver plan (2016 actuals to 2017 calculated) w/ member aging (~2%), not directly reflected in member contributions3 Enrollment-weighted non-group average premiums for Family High and Family Low based on age 20 and over premium value; Pediatric-only based on age less than 20 premium value4 Enrollment data as of August 2016

Summary of Seal of Approval Results For 2017, Unsubsidized and APTC-only (i.e., 300-400% of the federal poverty level) members will see significant premium increases, while the ConnectorCare program continues to generate competition on the Silver tier. However, there is significant variation between the premium trends among carriers, with notable outliers.

Changes in Premium: 2016 to 2017Merged Market

(Division of Insurance)Unsubsidized &

APTC-only 1 ConnectorCare 2 Dental 350,790 members4 173,495 members 60,323 members

Excluding HPHC & NHP Excluding NHP28,153 members 130,992 members

7.3%19.0%6.7% 6.2%

6.6% 0.7%

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Qualified Dental Plan (QDP) Recommendation

Qualified Dental Plans UpdateAs noted in the Conditional Seal of Approval presentation in July, we received a late request from Guardian to consider their products for our shelf, and are now recommending to accept Guardian for the 2017 Seal of Approval. As in 2016, Guardian only submitted QDPs for the small group shelf Guardian submitted the required three standardized plan designs: Family High,

Family Low and Pediatric-only Guardian did not submit any non-standardized plans for 2017

Additionally, Guardian submitted all other required materials, has received approval from the Division of Insurance and has met the requirements described in the Seal of Approval

Health Connector staff have reviewed the submission and recommend that Guardian be approved for the 2017 Seal of Approval

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Qualified Dental Plans: Product Shelf All four carriers have submitted at least one offering for each of the required three

standardized plan designs: Family High, Family Low and Pediatric-only Four non-standardized plan designs have been proposed by two carriers

Delta Dental proposed three non-standardized plans and Blue Cross Blue Shield of MA proposed one non-standardized plan, all previously offered in 2016

Carriers Non-Group

Small Group

Standardized Plans Non-Standardized Plans All PlansHigh Low Pedi Total High Low Pedi TotalAltus Dental 1 1 1 3 - - - 0 3

Blue Cross Blue Shield of MA 1 1 1 3 - - 1 1 4

Delta Dental of MA 2 2 2 6 - 1 2 3 9Guardian 1 1 1 3 - - - 0 3

Standardized Plans Non-Standardized Plans All PlansNon-Group 9 3 12

Small Group 15 4 19 9

Overall, non-group members enrolled in QDPs will see an average decrease in premiums of 7.3%, with those enrolled in Family Low and Pediatric-only products experiencing larger decreases.1

Qualified Dental Plans: Non-group Premiums

Non-group Dental Average Changes in Premium by Tier: 2016 to 2017 1Family High Family Low Pediatric-only

16,912 members2 43,783 members 629 members5.3% 12.2% 25.0%

Non-group Dental Average Changes in Premium by Carrier: 2016 to 2017

1 Enrollment-weighted non-group average premiums for Family High and Family Low based on age 20 and over premium value; Pediatric-only based on age less than 20 premium value2 Enrollment as of August 8, 2016

Carriers Membership Share2 Premium Change1

Altus Dental 16% 12.0%Delta Dental of MA 84% -10.8%

OVERALL -7.3%

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Qualified Dental Plans: Renewal ApproachMore than 99% of dental members will be renewed into the same plan as 2016, with a majority of members seeing a decrease in their premiums for 2017. For the very limited enrollment in the one closing QDP, members will be mapped

to the lowest cost plan from the same carrier in the Pediatric-only tier

Renew into Same Plan99.90%

Plan Closing (Market-wide)0.10%

QDP Renewal Status for 2017 (Members)1

1 Enrollment as of August 8, 2016 11

Qualified Health Plan (QHP) Recommendation

Qualified Health Plans: Product ShelfTen (10) medical carriers have a total of sixty-two (62) QHPs for the non-group and small group shelves. As required, all carriers proposed at least one (1) plan for each of the four (4)

standardized plan designs on the carrier’s broadest commercial network Fallon Health proposed standardized plans on alternative networks Three carriers requested to waive offering the standardized Bronze plan

Carriers submitted seventeen (17) non-standardized plans, including five (5) new non-standardized plans for 2017

Fallon Health has submitted four (4) non-standardized plans offered in 2016 as “frozen plans” for 2017 (i.e., not accepting new enrollments)

All carriers submitted Catastrophic plans as required, with six (6) carriers requesting to waive their Catastrophic plan offering

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Qualified Health Plans: Product Shelf (cont’d)The chart below outlines the QHP product shelf proposed for the Health Connector’s consideration for 2017.

Carriers Platinum Gold Silver Bronze Catastrophic TotalBlue Cross Blue Shield 1 1 1 1 1 5BMC HealthNet Plan 1 1 2 1 0 5

CeltiCare Health 1 1 1 0 0 3Fallon Health 2 3

(+2 frozen) 4 2(+2 frozen) 1 12

(+4 frozen)Health New England 1 4 1 0 0 6

Harvard Pilgrim Health Care 1 2 2 1 0 6Minuteman Health 2 1 2 2 1 8

Neighborhood Health Plan 1 2 2 1 0 6Tufts Health Plan - Direct 1 2 2 1 1 7

Tufts Health Plan - Premier 1 1 1 1 0 4TOTAL 12 18

(+2 frozen) 18 10(+2 frozen) 4 62

(+4 frozen)

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Qualified Health Plans: Unsubsidized & APTC-only PremiumsUnsubsidized and APTC-only members will generally see significant premium increases. Overall, Unsubsidized and APTC-only members will see a 19% increase in 20171

Excluding Neighborhood Health Plan and Harvard Pilgrim plans, outliers with much higher increases, the increase drops to 6.6%1

These data represent the change in “member-facing” premiums when mapped to the member’s corresponding 2017 plan (e.g., if a member’s 2016 plan is closing, then their experience is captured as the premium increase from the closed plan to their new plan)

Platinum Gold Silver Bronze Catastrophic5,537 members 9,837 members 28,350 members 6,493 members 573 members

All PlansExcluding

HPHC & NHP

Unsubsidized & APTC-only Average Changes in Premium by Tier: 2016 to 20171

20.8%14.5%17.6% 23.3% 4.4%

1 Enrollment-weighted premium change (2016 actuals to 2017 calculated) w/ member aging (~2%), assumes mapping to 2017 renewal plan

4.7%9.6%8.8% 8.6% 4.4%

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The premium changes for some plans will be significantly larger than the merged market-wide or Health Connector average increases.Unsubsidized & APTC-only Average Changes in Premium by Carrier: 2016 to 2017

1 Enrollment data as of August 20162 Enrollment-weighted premium change (2016 actuals to 2017 calculated) w/ member aging (~2%), assumes mapping to 2017 renewal plan 3 Premium change reflects HNE 1/1/16 premium submission which contained an error resulting in consumer facing premiums being ~10% lower than intended

Carriers Membership Share1 Premium Change2

Neighborhood Health Plan 28% 24.7%Tufts Health Plan - Direct 24% 2.6%

Harvard Pilgrim Health Care 17% 47.1%BMC HealthNet Plan 9% 1.4%

Blue Cross Blue Shield 7% 12.0%Minuteman Health 5% 9.1%

Tufts Health Plan - Premier 5% 10.4%Fallon Health 3% 5.4%

Health New England3 3% 17.1%CeltiCare Health <1% 4.2%

OVERALL 19.0%

Qualified Health Plans: Unsubsidized & APTC-only Premiums (cont’d)

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Newly eligible Unsubsidized and APTC-only members, and those who elect to shop, will have products with a range of premiums costs available in each metallic tier.

$825

$571$483 $453$485

$347$288 $266

$601

$453$360 $321

$0$100$200$300$400$500$600$700$800$900

Platinum Gold Silver Bronze

Unsubsidized Premium Range (42 year-old in Worcester) by Tier, 20171

Maximum Minimum AveragePlatinum Gold Silver Bronze

1 Premiums reflect an unsubsidized 42 year-old individual in Worcester

Qualified Health Plans: Unsubsidized & APTC-only Premiums (cont’d)

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As part of Open Enrollment, all current members will have the opportunity,and will be encouraged, to shop and compare plans.

Due to the high volume of enrollment in plans experiencing significant premium increases, many subscribers will see large increases in their renewal premiums.

Most members will be able to shop for a similar or identical plan from a different carrier with lower monthly premiums

1 Enrollment-weighted premium change (2016 actuals to 2017 calculated) w/ member aging (~2%), assumes mapping to 2017 renewal plan

Unsubsidized & APTC-only Average Subscriber-level Changes in Premium: 2016 to 2017 1

Decrease Increase <$10

Increase $10 -$25

Increase $25 -$50

Increase $50 -$75

Increase $75 -$100

Increase $100 -$150

Increase $150 -$200

Increase >$200

9% 17% 9% 11% 10% 9% 12% 9% 16%

Qualified Health Plans: Unsubsidized & APTC-only Premiums (cont’d)

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ConnectorCare Recommendation

ConnectorCare: OverviewThe Final SOA also includes the recommendation of those carriers that will participate in the ConnectorCare program, which offers state premium and cost-sharing subsidies for individuals under 300% of the Federal Poverty Level (FPL).

APTC Amount*$192.00State Premium* Subsidy$53.01

Member Contribution*$43.00Co

st of U

nderly

ingLow

est Co

st Silve

r Plan

$288.0

1*

The ConnectorCare selection process reviews the ConnectorCare-compatible Silver plan offerings from each carrier

The selection criteria to be a ConnectorCare carrier include price competitiveness, provider and facility access, and experience with serving the subsidized population

Selection of the 2017 ConnectorCareparticipating carriers is designed to provide continued access to those carriers currently participating in ConnectorCare or the MassHealth MCO program to ensure continuity

ConnectorCare supplements federal Advance Premium Tax Credits (APTC) with State subsidies to create a more affordable program for eligible MA residents.ConnectorCare supplements federal Advance Premium Tax Credits (APTC) with State subsidies to create a more affordable program for eligible MA residents.

*Reflects the cost of subsidizing the lowest cost plan for a 42 year old living in Worcester, earning $20,000 per year or 168.35% FPL, and thus in Plan Type 2B (150-200% FPL). Note: the Member Contribution equals the state affordability schedule amount for that income cohort because this example is subsidizing the lowest cost silver plan available to this person. 20

ConnectorCare: Recommended Carriers and RegionsCarriers indicated in GREEN have moved to a lower cost position relative to 2016, while carriers indicated in RED have moved to a higher cost position. Prior carrier in rank order position is noted in parentheses.Cluster Lowest Cost 2nd Lowest Cost 3rd Lowest Cost 4th Lowest Cost 5th Lowest Cost

A1 BMCHP(formerly Tufts-Direct)

Tufts-Direct(formerly BMCHP) NHP HNE CeltiCare

A2 BMCHP(formerly Tufts-Direct)

Tufts-Direct(formerly BMCHP) HNE CeltiCare

A3 Tufts-Direct HNE CeltiCareA4 HNE CeltiCareB1 BMCHP

(formerly Tufts-Direct)Fallon(formerly NHP)

Tufts-Direct(formerly Fallon)

NHP(formerly BMCHP) CeltiCare

C1 Tufts-Direct BMCHP(formerly Minuteman)

Minuteman(formerly BMCHP) NHP CeltiCare

C21 Tufts-Direct BMCHP(formerly Minuteman)

Minuteman(formerly BMCHP)

Fallon (new entrant)(formerly NHP)

NHP(formerly CeltiCare)2

D1 BMCHP Tufts-Direct Minuteman CeltiCare(formerly NHP)

NHP(formerly CeltiCare)

E1 BMCHP(formerly Tufts-Direct)

Tufts-Direct(formerly BMCHP) Minuteman CeltiCare

(formerly NHP)NHP(formerly CeltiCare)

F1 BMCHP(formerly Tufts-Direct)

Tufts-Direct(formerly BMCHP) Minuteman CeltiCare NHP

F2 CeltiCare NHPG1 BMCHP

(formerly Tufts-Direct)Tufts-Direct(formerly BMCHP)

CeltiCare(formerly NHP)

NHP(formerly CeltiCare)

G2 NHPG31 BMCHP

(formerly Tufts-Direct)Tufts-Direct(formerly BMCHP)

Minuteman (new entrant)(formerly NHP) CeltiCare NHP3

1 New Region for 20172 CeltiCare no longer selected in new Region C2 due to new entrant (Fallon)3 NHP moved to higher cost position in new Region G3 due to new entrant (Minuteman)

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ConnectorCare: Underlying Silver Premium ChangesFor 2017, the ConnectorCare program continues to generate positive competition at the lower end of the Silver tier. However, there is significant variation among the premiums of the selected carriers.

1 Enrollment-weighted premium change from 2016 ConnectorCare selected Silver plan to 2017 selected Silver plan (2016 actuals to 2017 calculated) w/ member aging (~2%)2 Membership based on August 2016 ConnectorCare enrollment3 Premium change reflects HNE 1/1/16 premium submission which contained an error resulting in consumer facing premiums being ~10% lower than intended

For 2017, the underlying selected Silver plan premiums for the ConnectorCare program will see an average 6.2% increase1

Excluding Neighborhood Health Plan, the underlying selected Silver plan premiums only increase by 0.7%1

Carriers Membership Share2 Premium Change1

Tufts Health Plan - Direct 51% 2.3%Neighborhood Health Plan 24% 20.7%

BMC HealthNet Plan 18% -7.9%Health New England3 3% 16.8%

Fallon Health 2% 1.6%Minuteman Health 1% 1.8%CeltiCare Health 1% 7.8%

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ConnectorCare: Enrollee Contributions

ConnectorCare Member Contribution Range for 2017

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We are modifying the premium structure for 2017 to promote the most competitively priced options in the program and avoid additionally subsidizing those plans that filed significant rate increases this year.

ConnectorCare: Enrollee Contributions (cont’d) The changes in enrollee contributions, in addition to changes in relative price positioning of

the ConnectorCare carriers, will result in a wide range of impacts to members Most members enrolled in BMC HealthNet Plan and Tufts Health Plan – Direct, generally the lowest

cost plans, will experience either a decrease or a small increase in enrollee contributions for their renewal plan

Members enrolled in higher cost plans, particularly Neighborhood Health Plan, will see significant increases in contributions for their renewal plan – as high as $165 per month1

ConnectorCare enrollees facing large increases will be able to shop for a ConnectorCare plan from a different carrier with lower monthly contributions

1 Increase for Neighborhood Health Plan, Plan Type 1, Region G12 Expected member-level enrollee contribution change into renewal plan from the same carrier, if available (after APTC and state premium subsidy); percentage values represent proportion of members 24

Changes in ConnectorCare Monthly Enrollee Contributions2

Decrease No Change Increase <$10

Increase $10 - $25

Increase $25 - $50

Increase $50 - $75

Increase $75 - $100

Increase >$100

15% 10% 34% 12% 3% 4% 8% 14%

Member Communications Approach

Comparison Shopping: Planned CommunicationsDuring this year’s Open Enrollment, all member communications will strongly encourage shopping as the best way to find a good “deal” for 2017. In addition to promoting shopping, we will be encouraging

members to get help from Enrollment Assisters, and to take advantage of our decision support tools (e.g., shopping guides, provider search, etc.)

We will be sending communications including emails, personalized letters, special inserts into monthly bills, and may deploy a robo-call campaign to encourage shopping

Key Messages include: Highlighting potential changes in monthly premiums, but making clear

that there are options available offering the same or similar benefits The Health Connector has tools to help you find a good, affordable

plan with access to excellent care26

Comparison Shopping: Key Messages

“We know you might be facing significant changes in your plan for 2017, but

we are here to help.”

“All of our plans include access to quality doctors, hospitals and other

medical care in your area. If you think it might be time to consider a new plan, you can use our tools to find a new doctor that can give you

the care you need.”

“For many people, there are opportunities to find a plan that

includes the same level of benefits and access to care, but at a lower cost. It can be worth taking a few

minutes to review your options and save hundreds of dollars over the

course of the year.”

“We know this can be a confusing and stressful process, but help is available. We have walk-in centers and community organizations around the state with staff who are trained and

ready to help you pick the right plan.”

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Vote

VOTEThe Health Connector recommends awarding the 2017 Final Seal of Approval to all recommended standardized and non-standardized QHPs and QDPs proposed by the following carriers:• Altus Dental• Blue Cross Blue Shield of MA• Boston Medical Center HealthNetPlan• CeltiCare Health• Delta Dental of MA• Fallon Health• Guardian

• Harvard Pilgrim Health Care• Health New England• Minuteman Health• Neighborhood Health Plan• Tufts Health Plan – Direct• Tufts Health Plan – Premier

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Appendix

Qualified Health Plans: 2017 Standardized DesignsPlan Feature/ Service

A check mark () indicates that this benefit is subject to the annual deductible Platinum Gold Silver Bronze Annual Deductible – Combined N/A $1,000 $2,000 N/A

N/A $2,000 $4,000 N/AAnnual Deductible – Medical N/A N/A N/A $2,750

N/A N/A N/A $5,500Annual Deductible – Prescription Drugs N/A N/A N/A $250

N/A N/A N/A $500Annual Out-of-Pocket Maximum $3,000 $5,000 $7,150 $7,150

$6,000 $10,000 $14,300 $14,300Primary Care Provider (PCP) Office Visits $25 $30 $30 $25 Specialist Office Visits $40 $45 $50 $40 Emergency Room $150 $150 $700 $500 Urgent Care $40 $45 $50 $40 Inpatient Hospitalization $500 $500 $1,000 $1,000 Skilled Nursing Facility $500 $500 $1,000 $1,000 Durable Medical Equipment 20% 20% 20% 20% Rehabilitative Occupational and Rehabilitative Physical Therapy $40 $45 $50 $40 Laboratory Outpatient and Professional Services $0 $20 $25 $50 X-rays and Diagnostic Imaging $0 $20 $25 $175 High-Cost Imaging $150 $200 $500 $1,000 Outpatient Surgery: Ambulatory Surgery Center $500 $250 $750 $750 Outpatient Surgery: Physician/Surgical Services $0 $0 $0 $0

Prescription Drug

Retail Tier 1 $15 $20 $20 $25 Retail Tier 2 $30 $30 $60 $75 Retail Tier 3 $50 $50 $90 $100 Mail Tier 1 $30 $40 $40 $50 Mail Tier 2 $60 $60 $120 $150 Mail Tier 3 $150 $150 $270 $300

2017 Final FAVC 91.73% 81.43% 71.84% 61.86% 31

ConnectorCare: 2017 Plan Designs

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Qualified Dental Plans: 2017 Standardized DesignsPlan Feature/ Service Family High Family Low Pediatric-only

Plan Year Deductible $50/$150 $50/$150 $50Deductible Applies to Major and Minor

RestorativeMajor and Minor

RestorativeMajor and Minor

RestorativePlan Year Max (>=19 only) $1,250 $750 N/APlan Year MOOP <19 Only $350 (1 child)

$700 (2+ children)$350 (1 child)

$700 (2+ children) $350 (1 child)Preventive & Diagnostic Co-Insurance (In/out-of-Network) 0%/20% 0%/20% 0%/20% Minor Restorative Co-Insurance (In/out-of-Network) 25%/45% 25%/45% 25%/45%Major Restorative Co-Insurance (In/out-of-Network) 50%/70%

50%/70%No Major Restorative

>=1950%/70%

Medically Necessary Orthodontia, <19 only (In/out-of-Network) 50%/70% 50%/70% 50%/70%Non-Medically Necessary Orthodontia, <19 only (In/out-of-Network) N/A N/A N/A

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