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 Healths 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 Taylors
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