© 2009 Regence. Private and Confidential.

1

ActivateSM – Healthy Living RewardedActivateSM – Healthy Living Rewarded

• Rewards employees for healthy choices

• Employees pay their doctors online

• Encourages healthy competition

• Supports loyalty through growing rewards

• Simple to administer

Key Attributes:

© 2009 Regence. Private and Confidential.

2

12

Regence ActivateSM Coverage

Health Plan• Simple benefit design• Affordable coverage• Options to choose from

Member Choice Account• $ rewards for healthy choices• Pays deductible & coinsurance• Provides up-front coverage• Funds roll over each year

Activate brings together a simple health plan with financial incentives for making healthy lifestyle choices

© 2009 Regence. Private and Confidential.

3

Member Choice Account

Save!• Use MCA to pay deductible & coinsurance

• Pay providers directly online

• Unused funds roll over each year

3

Log On• Sign up on myRegence.com

• Health assessment activates MCA

• $200 goes into MCA

1

Get Moving• 5,000 points = $10

• Earn up to $100 each quarter

• Members can earn $600 per year

2

Activate Home Page

© 2009 Regence. Private and Confidential.

4

Reward PointsReward PointsExamplesExamplesActivityActivity

Stress Management

Physical Activities

Preventive Health

Nutrition & Weight Loss

Online Activities

Activities Designed To Fit Any Lifestyle

250 points eachGo biking or walking; participate in team sports, take an exercise class

5000 points per year500 points per year

Get an annual women’s or men’s exam; Get a flu shot

500 points eachIncrease fiber intake;Eat fruits and vegetables

600 points per year500 points per month

Get help with child care; get a massage

100 points each500 points per use

Read health-related articlesUse the Health Cost Estimator Tool

Over 100 activities available to choose from!

© 2009 Regence. Private and Confidential.

5

Typical Copay PlanActivateHealthy Living Rewarded

Member Choice AccountUp-front Benefits

Activate offers a unique option for pre-deductible benefits

$600 Member Choice Account $20 copay / Upfront Lab & X-ray

• 100%coverage – no copays

• Benefits are member’s choice

• Accumulates toward deductible

• Funds roll over each year to build equity over time

• Pay your doctor online

Advantages Advantages• Provides cost predictability

• Full benefit is available day one

• Doesn’t require engagement

Considerations• Full benefit is achieved

throughout the year

• Requires engagement

Considerations• Always have to pay cost share

• Benefits are specified

• Does not accumulate toward deductible

• Use it or lose it benefits

© 2009 Regence. Private and Confidential.

6

Member Choice AccountWhat’s it Worth?

Nearly ½ of insured consumers spend less than $600 on medical expenses each year

Common Services MCA Benefit

A $600 MCA will pay for… 1 wellness exam, a mammogram, 2

doctor visits, a cholesterol screening and an allergy shot

or…

1 wellness exam, a doctor visit, a specialist visit and two x-rays

or…

5 doctor visits

…it is all up to the member

And it all counts toward the deductible!

Adult wellness exam $150 - $190

Well-child/baby exam $100 - $135

Doctor visit $100 - $120

Specialist visit $215 - $280

Immunizations $10 - $15

Cholesterol screening $20 - $50

X-ray $25 - $80

Mammogram $85 - $150

PSA Test $30 - $60

Allergy injection $50 - $60

Source: RBS 2008-2009 network discount costs

Why $600? ][

© 2009 Regence. Private and Confidential.

7

Member Choice AccountThe Employee Perspective

Let’s look at the spending habits of 100 typical consumers.See how a $600 MCA creates value for all employees.

Source: Regence 2007-2008 claims data

Member Claims

These members

will have no costs, so all funds are retained(15%)

Covers most costs

(20%)

Buys down deductible by

$600(35%)

Covers all costs (30%)

$5,000+$0 $600 $1,500

© 2009 Regence. Private and Confidential.

8

Couple

Family of 4

Year 1 Year 2 Year 3 and Beyond

Single

Building Loyalty Through Rewards

Earned Account Rollover Total RolloverDeductible is max. amount

$600

$1,200

$2,400

$1,200

$2,400

$4,800

$1,800

$4,800

$7,200

Each family member's MCA remains separate

Total sum value is displayed

© 2009 Regence. Private and Confidential.

9

Keeping Employees

Engaged

Keeping Employers

Informed

Supporting Program Success

• Online scorecard to track and improve participation

• Communications triggered by low activity levels

• Superior interactive reporting

• Employee activity participation

• MCA earnings, expenditures, and rollover

Elizabeth

Heather

Richard

Account Overview Activity Graph

Activated Members

50%

35%

85%

© 2009 Regence. Private and Confidential.

10

A Solution That Strikes at Health Care Dysfunction

• Creates a direct connection between behavior and cost at the employee level

• Encourages loyalty through growing rewards

• Gets the entire family involved

• Offers a seamless web-based experience

Regence Activate…

© 2009 Regence. Private and Confidential.

11

You Choose From Three Categories of Providers

Employees can select the Provider(s) they want, depending on the portion of the cost they wish to pay - providers fall into one of three categories:

Category 1 90% of doctors

Lowest patient cost

Category 2 3% of doctors

Moderate patient cost

Category 3 7% of doctors

Highest patient cost

© 2009 Regence. Private and Confidential.

12

ActivateSM Snapshot

*Deductible

*Coinsurance

Coinsurance Maximum

Lifetime Maximum

Member Choice Account

Riders

$1,500, $2,000, $3,000

80/60/60

$3,000 $4,000 $6,000

$2 million

Up to $600 per member

4 options - Vision, EAP, Spinal Manipulations, Complementary Care

Medical

* Can be paid with MCA funds

© 2009 Regence. Private and Confidential.

13

ActivateSM Snapshot

Generics

Brand Formulary

Brand Non-Formulary

Deductible Options

Annual OOP Max (Per member)

$5 $7 $10 10%

75% 70% $35 70%

50% 50% $75 50%

$250, $500, $1,000

NA

Rx

© 2009 Regence. Private and Confidential.

14

What is a Value-Based Benefit Design?

• Value in healthcare depends on Improving health Reducing financial barriers to

effective treatments

• Future treatment costs tend to be more manageable for those actively involved in their own health

• Financial incentives drive improved health status:

Reduced financial barriers for medication therapies of higher clinical value

Goal is to improve medication adherence

© 2009 Regence. Private and Confidential.

15

Providing Value to Everyone

EmployerEmployer EmployeeEmployee

• Incentives to take personal responsibility to improve/maintain health

• Aligns preventive benefits with better access to high value medications

• Decreases financial barriers to medication adherence

• Employees who are healthier, engaged and productive

• Drive reduced absenteeism

• Better medication adherence may reduce treatment costs

Example

Untreated high cholesterol can lead to atherosclerosis, causing restricted blood flow that could lead to heart attack or stroke.

ER costs or other medical care could potentially be avoided by following a medication regimen.

© 2009 Regence. Private and Confidential.

16

Activate Rx: Transformational Pharmacy Product

• Integration of wellness and prevention

• Not subject to deductible are Generics and Formulary Brands frequently used for:

High cholesterol

High blood pressure

Asthma

Diabetes

• Diabetic patients can receive a generic medication for high cholesterol for $0 copay

Smoking cessation

© 2009 Regence. Private and Confidential.

17

[Insert Customer Name Here][Insert Customer Name Here]

Helping You Plan for a Healthier FutureHelping You Plan for a Healthier Future

Thank you for your time!Questions?