AlaskaCare Health Plan ASHNHA September 11, 2014

1. AlaskaCareHealth PlanASHNHASeptember 11, 2014

2. State Health Care Spending 2013 = $2.28 billion AlaskaCare - ASHNHA - September 11, 2014

3. PERS/TRS Unfunded Liability AlaskaCare - ASHNHA - September 11, 2014

4. Benefits: PERS/TRS PERS/TRS GF State Assistance (SB125 & HB 385) Projected GF State Assistance (Level Dollar) TRS Assistance PERS Assistance AlaskaCare - ASHNHA - September 11, 2014

5. Retiree Plan Demographics • Average number of members (plus dependents) is around 67,000 • Higher distribution of women, especially between the ages of 45 and 64 • Average age is 64 • Top 5 diagnostic categories, 57.2 of total medical spend: • Musculoskeletal: Back Pain/Degenerative, Mechanical Joints, Thoracolumbar, Fractures • Oncology: Chemotherapy, Breast Cancer, Neoplasms, Prostate Cancer • Digestive: Intestinal Disorders, Abdominal Pain, Hernias, GI cancer • Cardiac: Atrial Fibrillation, Angina/chest pain, Acute M.I. (Heart Attack), Valvular Disease • Neurologic: Cerebrovascular (brain), Peripheral Nerve (brain and spinal cord) • High cost claimants significantly impact spending: • 62 individuals, $10,533,721 in spending • Challenges specific to this plan: • Specialty medication (Sovaldi: 13 members, $842,271 in costs) • Unmanaged diabetes • Specialty surgery AlaskaCare - ASHNHA - September 11, 2014

6. Retiree Plan Challenges • Lack of agility/flexibility (diminishment clause) • Outdated plan structure and benefits • Plan is not mainstream • Dispersed population • Plan demographics • Network development/access • Cost of services AlaskaCare - ASHNHA - September 11, 2014

7. Next Steps AlaskaCare - ASHNHA - September 11, 2014

8. AlaskaCare Health Plan Goals Provide AlaskaCare members with the care they need at a price they can afford by: • Building out the provider networks • Increasing member engagement • Supporting evidence-based medicine and promoting data-driven decision making • Collaborating with providers to transform the Alaska health care market AlaskaCare - ASHNHA - September 11, 2014

9. 2014 Accomplishments • First quarter savings estimated at more than $15 million in the retiree plan when compared to same period in 2013 • Introduction of a dental network and reduced DVA premiums • Held 10 town halls to understand member concerns • Modified plan administration based on input from members • Maintained medical expertise in health leadership team • Developed better internal processes and procedures to manage the health plan AlaskaCare - ASHNHA - September 11, 2014

10. Improving service with Aetna • Plan administration—working on this daily • CareEngine and Care Considerations program by ActiveHealth • Increased plan savings and more robust network • Use of data warehouse to inform plan decisions • Single point of contact concierge team AlaskaCare - ASHNHA - September 11, 2014

11. Monthly Health Insurance Benefit Credit • Average annual growth of 7% • Almost doubled in 10 years • Recent effort to proactively management of costs • FY 2015 -- beginning to bend the curve down AlaskaCare - ASHNHA - September 11, 2014

12. More information online at www.AlaskaCare.gov Thank you. AlaskaCare - ASHNHA - September 11, 2014