BLUE CROSS AND BLUE SHIELD OF MONTANA 2018

BLUE CROSS AND BLUE SHIELD OF MONTANA 2018 Individual and Small Group Rate Filings 7/24/2017

PRODUCT PORTFOLIO RETAIL Category Metal Number of Plans Range of Individual Deductibles Range of Individual Out-of. Pocket Maximums (Including Deductibles) Range of General Coinsurance • Platinum Gold Silver Bronze Catastrophic 2017 2018 0 0 3 2 5 3 1 1 Not Available $500 - $1, 650 $0 - $450 $2, 500 - $3, 850 $1, 000 - $3, 500 $5, 000 - $6, 500 $2, 700 - $4, 000 $7, 150 $7, 350 Not Available $3, 350 - $5, 250 $7, 350 $4, 500 - $7, 150 $7, 350 $6, 500 - $7, 150 $6, 550 - $7, 350 $7, 150 Not Available $7, 350 Not Available 70% - 80% 60% - 70% - 80% 50% - 70% 60% - 100% 50% - 70% 100% The networks being offered and the rating areas in which they are available have not changed from 2017 to 2018. 7/24/2017 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 2

2018 INCREASES BY METALLIC LEVEL, BY RATING AREA, & BY NETWORK RETAIL Metallic Level Catastrophic 31. 1% N/A Bronze 23. 6% 13. 5% Silver 25. 3% 19. 8% Gold 14. 6% 14. 4% Rating Area 7/24/2017 Blue Preferred Blue Focus POS 1: Billings 18. 7% 17. 5% 2: Great Falls 24. 1% N/A 3: Missoula 22. 6% 17. 3% 4: Non MSA 24. 7% N/A INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 3

SOURCES OF 2018 CHANGE RETAI L Trend Market Stabilization Rule 2017 Rate Sufficiency 2018 Risk Deterioration Miscellaneous Impact 9. 6% -1. 4% -6. 0% 0. 8% -0. 1% Average Increase Before ACA Provisions 2. 3% ACA Provisions (CSR/Mandate/Etc) Insurer Fee 17. 3% 2. 6% Average Rate Increase 23. 1% • The Impact of Medicaid Expansion was estimated to be a 6. 6% decrease in market average risk between the 2015 experience period and the 2017 projection period when developing the 2017 rates. • No adjustment was made to the 2018 rates for the Impact of Medicaid Expansion in addition to what was already built into the 2017 rates. 7/24/2017 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 4

ADMINISTRATIVE EXPENSE LOAD RETAIL Administrative Expense Load as a Percentage Administrative Expense Load as a PMPM Dollar Amount 7/24/2017 2018 9. 2% $56. 09 7. 0% $47. 24 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 5

CONTRIBUTION TO RESERVES RETAIL Reserves Load (Pre-Tax) as a Percentage Reserves Load (Pre-Tax) as a PMPM Dollar Amount Reserves Load (Post-Tax) as a Percentage Reserves Load (Post-Tax) as a PMPM Dollar Amount 7/24/2017 6. 9% $46. 83 5. 5% $37. 47 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 6

MEMBERSHIP PROJECTIONS RETAIL The 2018 membership projection is variable, depending on certain factors such as potential regulatory changes, final product pricing and consumers’ purchasing decisions. 7/24/2017 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 7

PRODUCT PORTFOLIO SMALL GROUP Category Metal Number of Plans Range of Individual Deductibles Range of Individual Out-of. Pocket Maximums (Including Deductibles) Range of General Coinsurance • Platinum Gold Silver Bronze 2017 2018 2 2 9 9 5 5 2 3 $250 - $750 $0 - $4, 000 $750 - $4, 200 $2, 250 - $3, 650 $3, 000 -$6, 500 $5, 500 - $6, 000 $5, 500 -$7, 350 $1, 250 - $1, 500 $2, 000 - $6, 850 $2, 000 - $4, 700 $3, 650 - $7, 000 $3, 700 - $7, 350 $6, 450 - $6, 550 $6, 450 - $7, 350 80% 50% - 100% 70% - 80% 70% - 100% The networks being offered and the rating areas in which they are available have not changed from 2017 to 2018. 7/24/2017 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 8

2018 QUARTERLY INCREASES BY METALLIC LEVEL AND BY RATING AREA SMALL GROUP Metallic Level Q 1 Q 2 Q 3 Q 4 Bronze 4. 7% 3. 6% 2. 6% 10. 0% Silver 1. 9% 0. 9% -0. 1% 7. 1% Gold 5. 4% 4. 3% 3. 3% 10. 7% Platinum 8. 3% 7. 2% 6. 1% 13. 8% Q 1 Q 2 Q 3 Q 4 1: Billings 1. 6% 0. 6% -0. 4% 6. 7% 2: Great Falls 4. 8% 3. 8% 2. 7% 10. 2% 3: Missoula 4. 4% 3. 4% 2. 3% 9. 7% 4: Non MSA 5. 7% 4. 6% 3. 6% 11. 1% Rating Area 7/24/2017 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 9

SOURCES OF CHANGE 2018 Q 1 SMALL G ROUP Impact Trend Market Stabilization Rule 2017 Rate Sufficiency 2018 Risk Deterioration Miscellaneous 9. 8% 0. 0% -6. 1% -0. 2% -0. 8% Average Increase Before ACA Provisions 2. 1% ACA Provisions (CSR/Mandate/Etc) Insurer Fee 0. 0% 2. 3% Average Rate Increase 4. 4% • No adjustment was made to the 2018 rates for the Impact of Medicaid Expansion. 7/24/2017 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 10

ADMINISTRATIVE EXPENSE LOAD SMALL GROUP Administrative Expense Load as a Percentage Administrative Expense Load as a PMPM Dollar Amount 7/24/2017 2018 8. 03% 7. 98% $38. 65 $38. 51 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 11

CONTRIBUTION TO RESERVES SMALL GROUP Reserves (Pre-Tax) as a Percentage Reserves (Pre-Tax) as a PMPM Dollar Amount Reserves (Post-Tax) as a Percentage Reserves (Post-Tax) as a PMPM Dollar Amount 7/24/2017 5. 0% $24. 11 4. 0% $19. 29 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 12

MEMBERSHIP PROJECTIONS SMALL GROUP 2018 Projected Members 36, 385 7/24/2017 INITIAL PROPOSED RATES ARE NOT FINAL. SUBJECT TO CHANGE PRIOR TO FINAL RATE FILING DEADLINE. 13