CAPG Presentation Future Outlook for Medicare Advantage Presentation

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CAPG Presentation Future Outlook for Medicare Advantage Presentation for CAPG Presentation by Arthur Kummer

CAPG Presentation Future Outlook for Medicare Advantage Presentation for CAPG Presentation by Arthur Kummer Janis E. Carter Health Net

Discussion • Health Net's Product Portfolio & Approch Ø Who we are & what

Discussion • Health Net's Product Portfolio & Approch Ø Who we are & what we do • What is happening in the market Ø Growth Expectations Ø Funding Changes for 2014 • How is Health Net responding? Ø Local partnership approach with Providers Ø Risk Adjustment & Star Opportunity Highly Confidential & Proprietary 2

Health Net Medicare Product Portfolio High Performance Tailred High Performance Network Tailored Network (PSP)

Health Net Medicare Product Portfolio High Performance Tailred High Performance Network Tailored Network (PSP) Dual Special Need Plans (D-SNP) Employer Group Medicare Advantage Chronic Special Needs Plans Individual Medicare Advantage HMO Individual Medicare Advantage PPO Confidential & Proprietary Medicare Supplement 3

Health Net Medicare Programs operates in 4 states , and is the third largest

Health Net Medicare Programs operates in 4 states , and is the third largest plan in each market Health Net operates California Arizona Oregon Highly Confidential & Proprietary 4

California 2014 - Where Are We Now! County Served Alameda Contra Costa Fresno Placer

California 2014 - Where Are We Now! County Served Alameda Contra Costa Fresno Placer Sacramento San Francisco San Joaquin San Mateo Santa Clara Santa Cruz Solano Sonoma Stanislaus Yolo Kern Los Angeles Orange Riverside San Bernardino San Diego Santa Barbara MAPD PSP C-SNP D-SNP PPO n n n n n n n n n n n n n Highly Confidential & Proprietary 5

Health Net Membership Graph 250, 000 Western Region Membership MAPD 225, 000 200, 000

Health Net Membership Graph 250, 000 Western Region Membership MAPD 225, 000 200, 000 July 2013 - 236, 831 175, 000 150, 000 2007/12 2008/12 2009/12 2010/12 2011/12 2012/07 2013/01 2012/07 2007 - 2013 Highly Confidential & Proprietary 6

Health Net Strategy Health Net’s philosophy centers on a broad product portfolio to serve

Health Net Strategy Health Net’s philosophy centers on a broad product portfolio to serve the whole Medicare population in partnership with delegated capitated networks. Medical group and hospital partners need to be focused on the Medicare business with effective STARS and risk adjustment care gap programs. Health Net is launching three new provider specific plans for 2014 Zero member premium is key to growth in most markets Increased data access in both directions is the future. Highly Confidential & Proprietary 7

Medicare Outlook Projections for 2014 and beyond are uncertain. CBO suggests a more bullish

Medicare Outlook Projections for 2014 and beyond are uncertain. CBO suggests a more bullish picture, contrary to the Office of the Actuary (OACT). Divergence appears to be on how much pressure reduced payment rates will have on industry. Highly Confidential & Proprietary 8

California Growth Highly Confidential & Proprietary 9

California Growth Highly Confidential & Proprietary 9

Market Challenges CMS 2014 Rate Changes Impact Medicare Growth Rate + 3. 0% Star

Market Challenges CMS 2014 Rate Changes Impact Medicare Growth Rate + 3. 0% Star Bonus Health Reform RAF Reform Sequestration Net 0% to 5% -3% to -1% Opportunity -6. 7% to -1. 6% -0. 5% -7. 2% to 4. 9% Highly Confidential & Proprietary 10

Risk Adjuster Opportunity Actual Health Net data, reflecting the Top-10, and Bottom-10 RAF performers.

Risk Adjuster Opportunity Actual Health Net data, reflecting the Top-10, and Bottom-10 RAF performers. The variation between top quartile groups drives significant results to the bottom line. Highly Confidential & Proprietary 11

Star Measure Engagement - Providers have a direct impact on 58% of measures included

Star Measure Engagement - Providers have a direct impact on 58% of measures included in the Stars Rating Program making HN heavily reliant on the performance of its contracted provider groups (PPGs). Training, Tools & Resources Star Performance & Member Level Data Sharing • PPG Teleconference Trainings • Star Rating Program measure updates • Share best practices/coding tips for measure improvement/improved data capture • Patient engagement resources • Share PPG level Star Performance Reports • Distribute actionable patient level care gap lists w/ PPGs • Collaborate on activities to improve measure performance • Incorporate Stars into development of Strategic Provider Partnership (SPP) engagement strategy Highly Confidential & Proprietary 12

Star Measure Touch Points – Member Targeted Population • • Vision Benefit Mailer (98

Star Measure Touch Points – Member Targeted Population • • Vision Benefit Mailer (98 k) Silver-N-Fit Fitness Flyer (88 k) Preventive Screening Mailer (15 k) Disease Mgmt phone outreach Osteoporosis Education Packet (1, 500) Cardiovascular Care IVR (95 k) SNP Case Mgmt General Member • • Wellness Calendar (180 k) Wellness newsletter (180 k) Qtly email newsletter (52 k) Flu/Wellness visit IVR (137 k) Over 30 Initiatives (1 million touches) implemented/integrated into existing touch points ensure an organization-wide approach to improving Star measures and the overall member experience. General Member Outreach Targeted Member • • In-Home Wellness Visits (20 k) Care Alerts Rx Refill Reminder Calls (10 k) CS scheduling support for Preventive Screenings • Inpatient Care Transition Support • Follow-up outreach to members who file a CTM Member Specific Outreach Highly Confidential & Proprietary 13