Commonwealth Choice – Facilitator Model

Patrick HollandChief Financial Officer

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Commonwealth Choice

• Alternate distribution channel for the purchase of unsubsidized healthcare– Competing with intermediaries & Carriers– Exclusive distribution channel for Young

Adults [age 19-26 inclusive]• Standardized benefit designs within

coverage tiers• Range of affordable coverage options• Select and offer high value health plans

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Commonwealth Choice

• Seal of Approval (SoA) – Approval of BOD indicating that a health

benefit plan meets certain standards regarding quality and value

– Carriers with 5,000 or more members required to respond to Health Connector SoA

– SoA process intended to encourage innovation from Carriers

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Young AdultsSmall Business

Voluntary Plans Indiv.& Families

Leverage Existing Market

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Evolving Business Model

• During recent SoA process, moving from non-standard to standardized benefit designs

• Continue to simplify the shopping experience through website enhancements

• Greater use of consumer-facing decision support tools

• Small group options

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Goals of New Model

• Promote transparency and standardization

• Minimize disruption to existing members• Align choice of benefit designs with

consumer demand– Use of focus group results– Market survey data

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Key Aspects of SoA

• Carriers must respond to all proposed benefit designs

• Continue to encourage “Select” or “Tiered” networks

• If awarded SoA, selected carriers are required to participate in all tiers and products

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Key Aspects of SoA

• Benefit Designs– Based on research of Commonwealth Choice

members and non-members, SoA reflects;• Demand for choice of benefit designs and carriers• Balanced with need to make shopping experience easier

– Price transparency also rated high by consumers • Influential on carrier price-point

– Structure and refinement of most recent SoA reflects nearly two years of experience with exchange model

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SoA Results

• Awarded SoA to all existing Carriers and approved a new market entrant

• Carriers agreed to modify benefit plans to comport to Health Connector plan designs

• Reduced number of benefit designs from 27 to 9• New model allows consumer choice, but

streamlines benefit design options– Clearer and easier shopping experience for

consumer– Consistent with market research