What is ARHealthNetworks

1. What is ARHealthNetworks? Concept originated from AR Health Insurance Roundtable 6 Yrs Ago (policy development group) Joint Venture between ACHI/DHS/CMS/NovaSys Health Provides coverage option for 465,000 adult Arkansans without benefits today �Too good to be true!�

2. Tough Economic Times � Putting Pressure on Companies Providing Benefits Consider the State of Insurance in America Weakening insurance environment (Economic Policy Institute) Loss of jobs for four million Americans last year More companies deciding to eliminate benefits completely Erosion of benefits by 3% last year Disproportionately affects low-income and minorities Bottom 20% do not have employer-sponsored coverage Cost shifting from providers inflates the cash price Putting off care just makes you sicker

3. Consider the Uninsured (CDC) 45 million working Americans without benefits � (1 in six) 45% of working adults w/o benefits report have one or more chronic health problems 49% of this group forego needed care or drugs due to cost Seven times more likely to not have a regular source of care 27% report no visits to a health professional in the last year, compared to 7% of insured adults 21% report spending at least $2,000 out of pocket last year

4. Consider the Uninsured (CDC) Diabetes � 1.2 million report having diabetics Heart Disease � 1.7 million report having heart disease Asthma � 2 million report having asthma Arthritis � 3.6 million report having arthritis High Cholesterol � 3.3 million report having high cholesterol Hypertension � 4 million report having high blood pressure

5. Design of ARHealthNetworks Limited benefits helps keep pricing low Federal matching funds subsidizes claims cost of lower income participants Same 3 to 1 matching formula as AR Medicaid Asked CMS for a waiver to expand AR Medicaid Provides balance between needed benefits and price As of May 1st, there were 794 companies made up of 3,292 members enrolled; all of these were uninsured prior Over $4 million in claims dollars state-wide

6. Additional Design Considerations Plan designed with prevention in mind Members not accessing care correctly Need to place these members back into the insurance system Will not replace commercial insurance markets (12 month waiting period) Design intended to look like commercial products But with government focus Scope is bigger and deals with responsibilities to the industry

7. What is NovaSys Health�s Role? Process claims for this self-funded product Provide operational functions to the product (customer support, billing, etc.) Provide full Utilization Management services Oversee distribution of the product through broker/agent channels Utilizes the NovaSys Health Network

8. Employers That Are Eligible For ARHealthNetworks The Fed agreed to share cost, but with conditions Groups that have not sponsored a product in the previous 12 months 100% of the group qualifying for the subsidy must participate (unless they have other coverage) 50% or more of the group who do not qualify for the subsidy must participate (unless they have other coverage) Group size of 2-500 with at least one member qualifying for the subsidy Employer must be based in Arkansas

9. Members That Are Eligible For ARHealthNetworks Must be between 19 and 64 years of age Younger people qualify for ARKids First Older people are eligible for Medicare Must prove citizenship and residency to get the subsidy Must make at or below 200% of Federal Poverty Level for subsidy Members who are not citizens or residents of Arkansas can still be covered if they choose, but must pay full price

10. Benefits for ARHealthNetworks Annual benefits Renewable each 12 months 7 Inpatient Days Per Year (Pre-Cert Required) 2 Major Outpatient Services Per Year (Surgery, Major Diagnostic, ER Services) 6 Physician Office Visits Per Year Two Prescriptions Per Month (three-tier co-pay) Maximum annual benefit of $100,000 No medical underwriting questions

11. Deductibles & Co-Insurances $100 annual deductible (excludes office visits and prescriptions) After deductible, 15% co-insurance will be required $1,000 maximum out of pocket annually NovaSys Health providers must be used for benefits to be paid (including ER) No out of network benefits are offered Ongoing discounts apply after benefit is exhausted

12. Pharmacy Benefits Two Monthly Prescriptions Subject to Co-pay, but not Deductible $5 Generic $10 Brand Formulary $30 Brand Non Formulary Program administered by Express Scripts Wide choice of pharmacies No mail-order benefits

13. Pricing Rates based on age and gender of the member Spouse can be covered if desired (no children) Subsidized members have averaged about $32 per member per month Unsubsidized members have averaged about $287 per month

14. Consider the Taylor�s

15. Future Initial phase will be used to gauge the benefit structure/cost/marketability Will provide feasibility study for individual coverage State Government considering committing additional revenue to increase enrollment

16. Questions? Summary of Key Points First effective dates were 1/1/07 Limited benefit product means low cost Subsidized premium means low cost Niche product designed entirely for workers without medical benefits For more information, contact NovaSys Health at 1-800-540-7566 or www.arhealthnetworks.com