Appendix E

Description of Small Group Market
Benefits, Provided by WellPoint

The IOM committee found the WellPoint analysis of their products helpful in understanding benefit inclusions and exclusions in the small group market to complement the listing of covered services and exclusions found in Appendix C and F, respectively.



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Appendix E Description of Small Group Market Benefits, Provided by WellPoint The IOM committee found the WellPoint analysis of their products helpful in understanding benefit inclusions and exclusions in the small group market to complement the listing of covered services and exclusions found in Appendix C and F, respectively. 197

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198 ESSENTIAL HEALTH BENEFITS The Determination of Essential Health Benefits Background As outlined in our comments submitted to the Institute of Medicine (IOM) on December 6, 2010, WellPoint believes that when determining what benefits are essential, it will be imperative to balance the need for comprehensive, evidence-based coverage with the need to ensure access to affordable coverage for consumers. If “essential” is defined too broadly, such as by including benefits without a sound evidence base or items that are currently not included in many individual or employer benefit packages, consumers’ access to affordable coverage will be compromised. In order to better understand what benefits should be considered essential, WellPoint has undertaken a process to evaluate our fully-insured, small group market (where a small group is defined as one with 1 or 2 to 50 employees) product offerings across the country to identify where there is consistency across our products, where there might be differences, and the cost impacts of these differences. The attached exhibits illustrate our findings. As you will see, there is little variation in our typical small group plans within and across states. However, the cost impact of those benefits that vary can be substantial, especially when taken in sum. We share this information in the hopes that it may be helpful as the IOM makes its recommendations to the Department of Health and Human Services regarding the determination of essential health benefits. Large Group Benefits Plans offered in the small group market are standardized and provide little or no flexibility to add or remove coverage for services. These standard plans are offered in all markets, small, mid-size and large, but large groups (those with over 100 employees) have the flexibility to customize their plans. Thus, because large groups also start with the same standard product portfolios in each state as offered to small groups, large group products generally cover the same services as the small group products in any given state. The level of flexibility a large group has to customize their benefits is determined by funding type (fully-insured versus self-insured) and the size of the account. For example, a 150 life fully-insured group has less flexibility to customize benefits than a 1,000 life self- insured group. Most customization for large groups is around benefit cost share or benefit limits, not coverage/exclusions. Less than 5% of customization requests deal with adding coverage. Examples include requests to add coverage for specific non-covered prescription drugs or over-the-counter medications (majority), coverage for hearing aids, coverage for bariatric surgery, and coverage for infertility. Very few (only about 2%) of the large group customization requests are to remove coverage, and most of these are self-insured groups requesting to remove state mandated coverage (as such mandates generally apply only to fully-insured products). Helpful Definitions for Exhibit A  “Anthem/Blue Standard Coverage/Typical SG Plans” cover a standard set of medically necessary services including inpatient and outpatient hospital services, diagnostic services, physician visits and medical care, maternity care, surgical services, mental health and substance abuse services, therapy services, skilled nursing facility services, home health care services, preventive care services, and medical equipment and supplies. For more details on inclusions and exclusions to the standard plan, please see Exhibits B and C, respectively. o Most variation across these standard plans is driven by differences in cost-sharing, not covered services. 1

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199 APPENDIX E The Determination of Essential Health Benefits o There is some variation across these standard plans in the "amount" of benefit provided (for example, the number of visits or services covered). o Some variation exists across these standard plans regarding site of care requirements or limitations (for example, coverage may be limited to outpatient setting or coverage only provided if Center of Excellence used). o Some variation in medical management exists across these plans across states. o While the standard set of covered services in “Typical SG Plans” is generally consistent across plans in each state, regardless of the size of the small group, there are some differences across our plans from state to state resulting from state mandate requirements and/or market demand and competitor standards. The key differences are documented in Exhibit A. o As the membership numbers included in the Exhibit A indicate, the majority of WellPoint’s small group membership (90%+) are enrolled in standard coverage plans.  In several states, we offer plans, “Anthem/Blue Limited Coverage”, in the small group market that provide for a more restricted set of covered services. These plans are low cost options that primarily cover hospital and surgical services, and provide limited or no coverage for other medical services that are generally covered under the more standard plans.  The response in the “State Mandated Benefit” column indicates whether or not states require coverage of this service under state law and should provide some indication as to why a service may be covered. 2

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200 ESSENTIAL HEALTH BENEFITS The Determination of Essential Health Benefits Exhibit A: Standard Plan Variances Anthem/Blue Standard Coverage/ State Mandated Anthem/Blue Limited Typical Plan in the Small Benefit? Coverage Plan Group and Large Group Range of (Fully Insured Group Markets Benefit Impact Market) Small Group Membership Allocation (Groups with up to 50 employees for 99.70% 0.30% all states) Small Group Membership Allocation (Groups with up to 50 employees only 99.25% 0.75% for states where Anthem/Blue Limited Coverage is currently marketed) Allergy Testing and Injections 0-1% No Covered Not covered Alternative Medicine (Acupuncture, Coverage varies across, acupressure, massage therapy, 0-1% In few states Not covered but not within, states etc.) Coverage varies Coverage varies across, Autism Services 0-1% across, but not within, In several states but not within, states states Coverage varies Coverage varies across, across, but not within, but not within, states states Bariatric Surgery and Treatment of Some change to coverage Some change to Morbid Obesity (Rider pricing can 0-1% In a few states for services related to coverage for services be 3 to 10 times higher) obesity resulting from related to obesity PPACA preventive care resulting from PPACA implementation. preventive care implementation. Not covered Cardiac Rehabilitation 0-1% No Covered (optional coverage available) With very few exceptions, Dental Care - Preventive and Basic 1-3% offered as optional rider No Not covered (Beyond oral health screening) coverage Not covered Durable Medical Equipment 1-3% No Covered except if related to diabetes Coverage varies Coverage varies across, Early Intervention Services 0-1% In several states across, but not within, but not within, states states In a few states the mandate prohibits embedding coverage for Coverage varies across, Elective Abortion 0-1% fully insured products, Not covered but not within, states but allows coverage to be offered via optional rider 3

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201 APPENDIX E The Determination of Essential Health Benefits Anthem/Blue Standard Coverage/ State Mandated Anthem/Blue Limited Typical Plan in the Small Benefit? Coverage Plan Group and Large Group Range of (Fully Insured Group Markets Benefit Impact Market) Small Group Membership Allocation (Groups with up to 50 employees for 99.70% 0.30% all states) Small Group Membership Allocation (Groups with up to 50 employees only 99.25% 0.75% for states where Anthem/Blue Limited Coverage is currently marketed) Coverage varies across, Hearing Tests and Hearing Aids 0-1% In several states Not covered but not within, states Infertility and Assisted Coverage varies across, 1-3% In a few states Not covered Reproduction Services but not within, states Medical Nutrition Therapy Coverage varies across, 0-1% In several states Not covered (Diabetes-related) but not within, states Coverage varies across, but not within, states Medical Nutritional Therapy Some change to coverage 0-1% No Not covered (Obesity-related) for services related to obesity resulting from PPACA preventive care implementation. Not covered Mental Health and Substance 1-3% (optional coverage In several states Covered Abuse Services available) Coverage varies across, Orthotics and Special Footwear 0-1% In a few states Not covered but not within, states Outpatient Physical Therapy, Occupational Therapy, Speech 3-5% No Covered Not covered Therapy and Manipulation Services Pharmacy (Full Generic + Brand Generally generic and Generic only coverage 10+% No Coverage) brand covered (with some exceptions) Pharmacy (Generic Only to Full Generally generic and Generic only coverage 10+% No Generic + Brand Coverage) brand covered (with some exceptions) Pharmacy (Generic+1 to Full Generally generic and Generic only coverage 5-10% No Generic + Brand Coverage) brand covered (with some exceptions) 4

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202 ESSENTIAL HEALTH BENEFITS The Determination of Essential Health Benefits Anthem/Blue Standard Coverage/ State Mandated Anthem/Blue Limited Typical Plan in the Small Benefit? Coverage Plan Group and Large Group Range of (Fully Insured Group Markets Benefit Impact Market) Small Group Membership Allocation (Groups with up to 50 employees for 99.70% 0.30% all states) Small Group Membership Allocation (Groups with up to 50 employees only 99.25% 0.75% for states where Anthem/Blue Limited Coverage is currently marketed) Specific Types of Drugs (Not included in pharmacy impacts above): Smoking Cessation Drugs 0-1% Weight Loss Drugs 0-1% Coverage varies In a few states except Coverage varies across, across, but not within, contraceptive mandates but not within, states states in most states Infertility Drugs 0-1% Contraceptives 0-1% Sexual Dysfunction Drugs 0-1% Coverage varies Coverage varies across, across, but not within, but not within, states states Preventive Care Services Including All states mandate at This has changed to This has changed to Specific Screenings (Excludes 3-5% least some preventive comply with PPACA and comply with PPACA vision exam cost listed below) services standard non- and standard non- grandfathered plans now grandfathered plans include full preventive care now include full coverage preventive care coverage Coverage varies across, Private Duty Nursing 0-1% No Not covered but not within, states Not covered Prosthetics 0-1% In several states Covered (with some exceptions) Not Covered Pulmonary Rehabilitation 0-1% (optional coverage No Covered available) Coverage varies Coverage varies across, TMJ Treatment and Appliances 0-1% across, but not within, In several states but not within, states states 5

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203 APPENDIX E The Determination of Essential Health Benefits Anthem/Blue Standard Coverage/ State Mandated Anthem/Blue Limited Typical Plan in the Small Benefit? Coverage Plan Group and Large Group Range of (Fully Insured Group Markets Benefit Impact Market) Small Group Membership Allocation (Groups with up to 50 employees for 99.70% 0.30% all states) Small Group Membership Allocation (Groups with up to 50 employees only 99.25% 0.75% for states where Anthem/Blue Limited Coverage is currently marketed) Urgent Care Facility Services 0-1% No Covered Not covered Coverage varies Coverage varies across, Vision Exam/Refraction 0-1% No across, but not within, but not within, states states Actuarial Pricing Assumptions All cost impacts were trended to 1/1/2011 based on HAUS or Cost of Care Trends projections through 1/1/2011.  WellPoint’s commercial group pricing model was utilized to value cost impacts where claims experience was not readily  available. Network discounts used to value claims impacts were averaged across the company.   Impact estimates are relative to discounted allowed amounts (exclude impacts of member cost-sharing).  These assumptions are only estimates of the impact and cannot be relied upon for the purpose of setting rates. 6

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204 ESSENTIAL HEALTH BENEFITS The Determination of Essential Health Benefits Exhibit B: Standard Plan Inclusions Preventive Care  Outpatient Care (In a Clinician’s Office)  o Primary Care Office Visit o Specialist Office Visit o Pre and Post Natal Visits o Counseling (Family Planning, Nutritional, Other) o Allergy Testing o Allergy Shots o Diagnostic Lab (Non-Preventive) o Diagnostic X-Ray (Non-Preventive) o Other Diagnostic Tests (Hearing, EKG, etc.) (Non-Preventive) o Advanced Imaging (MRI, CT Scan, etc.) o Office Surgery o PT / OT / ST o Chiropractic Care / Spinal Manipulation o Therapy: Radiation / Chemo / Non-Preventive Infusion & Injection o Prescription Drugs and Administration (For the Drug Itself Dispensed In-Office via Infusion / Injection) o Dialysis / Hemodialysis o Outpatient Mental Health and Substance Abuse (Psychotherapy, etc.) Emergency Room (ER) Care  o Facility ER Charge o Other Facility Charges (Diagnostic Lab, X-Ray, Supplies, etc.) o Facility Advanced Diagnostic Imaging (CT Scan, etc.) o Physician Services (ER Physician, Radiologist, Anesthesiologist, Surgeon, etc.) Outpatient Care in a Hospital, Free-Standing Facility or Urgent Care Facility  o Facility Surgery Charge (Surgery Suite) o Other Facility Surgery Charges (Diagnostic Lab / X-Ray, Supplies, etc.) o Physician Surgery Charges o Facility Charge (Charge for Procedure Room, Other Ancillary Facility Services) o Physician Charges (Radiologist, Pathologist, Anesthesiologist, etc.) o Outpatient Mental Health and Substance Abuse (Facility) o Outpatient Mental Health and Substance Abuse (Professional) o Diagnostic Lab o Diagnostic X-Ray o Other Diagnostic (EKG, EEG, etc.) o Advanced Diagnostic Imaging (MRI, CT Scan, etc.) o PT / OT / ST / Spinal Manipulation o Therapy: Radiation / Chemo / Non-Preventive Infusion / Injection o Prescription Drugs and Administration (Drug Dispensed in Outpatient Facility via Infusion / Injection) o Dialysis / Hemodialysis 7

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205 APPENDIX E The Determination of Essential Health Benefits Inpatient Care  o Facility Room and Board Charge for:  Hospital (Acute Care Facility)  Skilled Nursing Facilities (SNF)  Mental Health / Substance Abuse Facility  Residential Treatment Center o Facility Other Charges (Diagnostics Lab / X-Ray, Supplies, etc.) o Physician Services for:  General Medical Care  Surgery  Maternity  Mental Health  Substance Abuse Home Care  o Home Health Care Services o Home Dialysis o Home Infusion Therapy Other  o Ambulance (Ground and Air) o Durable Medical Equipment (DME), Prosthetics, Medical Devices, Medical Supplies Received from Supplier o Hospice o Dental Services related to an Accident (Dentist’s Office) o Vision Services (Exam) 8

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206 ESSENTIAL HEALTH BENEFITS The Determination of Essential Health Benefits Exhibit C: Standard Plan Exclusions Charges for Administrative Services  o Exclude charges for administration or other service fees when not directly providing medical care. This includes, but is not limited to: completion of claim forms, charges for medical records or reports, missed or canceled appointments, storage or other administrative actions. Commercial Weight Loss  o Exclude Commercial Weight Loss Programs from core medical benefit. Complications of Experimental Services  o Exclude services related to complications resulting or arising from excluded services except where mandated or where DOI agreements have been made to cover. Cosmetic Surgery  o Exclude cosmetic surgery or other procedures performed solely for beautification or to improve appearance. Custodial Care  o Exclude custodial care (such as feeding, dressing, bathing, transferring, and activities of daily living). Does not apply to hospice. Dental Services  o Exclude routine dental services, including topical and oral fluoride preparations, from standard medical and pharmacy benefits except where mandated. o This does not apply to products with embedded dental coverage. o Exclusion does not apply to:  Anesthesia and associated facility charges as a result of age and/or disability criteria.  Dental accidents - treatment, sought within 12 months, of an injury to natural teeth and when a treatment plan submitted for prior approval. Injuries resulted from biting and/or chewing are not considered a dental accident.  Radiation - dental services to prepare the mouth for radiation therapy to treat head and/or neck cancer. Educational Services; Self-Training; Vocational Services  o Exclude educational services, self management / help training services, and vocational services except where mandated for diabetes and asthma, or where explicitly covered by another benefit. Experimental or Investigational Services  o Exclude services deemed to be experimental or investigational unless specifically covered (e.g., Clinical Cancer Trials). Food and Dietary Supplements  o Exclude benefits for food or food supplements, except formulas and/or food products that are:  Prescribed, ordered or supervised by a physician; and  Medically necessary as defined by medical policy. Foot Care  o Exclude routine or palliative foot care (comfort or cosmetic) unless medically necessary. 9

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207 APPENDIX E The Determination of Essential Health Benefits Gastric Bypass or Bariatric Surgery  o Exclude Gastric Bypass and Bariatric surgery except where mandated. Gynecomastia  o Exclude surgical treatments of gynecomastia for cosmetic purposes. Health Club Memberships  o Exclude Health Club Memberships from core medical benefit. Hearing Aids and Routine Hearing Tests  o Exclude coverage for hearing aids. Cover routine hearing screenings as a part of preventive care. Cochlear implants are not included in the exclusion. Infertility Services  o Exclude all assisted reproductive technologies (ART) and the associated diagnostic testing and Rx treatments to support ART. Examples include:  Artificial insemination  In-vitro fertilization  ZIFT – Zygote Intrafallopian Transfer  GIFT – Gamete Intrafallopian Transfer Legal Liability  o Exclude services for which the member has no liability to pay in the absence of this plan's coverage. This includes, but is not limited to: government programs; incarceration; workers compensation; and free clinics. Not Medically Necessary  o Exclude services deemed not medically necessary. Oral Surgery  o Exclude teeth extractions, surgical removal of impacted teeth, and other oral surgical services (not to include pharmacy services) for care of the teeth or of the bones and gums directly supporting the teeth. These services are dental in nature and not covered under medical. o Other Oral Surgical Services are covered, including:  Treatment of medically diagnosed cleft lip, cleft palate, or ectodermal dysplasia;  Orthognathic surgery that is required because of a medical condition or injury which prevents normal function of the joint or bone and is deemed medically necessary to attain functional capacity of the affected part;  Oral/surgical correction of accident related injuries  Treatment of lesions, removal of tumors and biopsies  Incision and drainage of infection of soft tissue not including tooth-related cysts or abscesses. Private Duty Nursing  o Exclude private duty nursing provided in an inpatient setting (acute care or skilled nursing facility). o Nursing services in a home or hospice setting are covered as a part of Home Health Care benefits and Hospice benefits. 10

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208 ESSENTIAL HEALTH BENEFITS The Determination of Essential Health Benefits Provider Not Recognized by Plan  o Exclude services, supplies, or devices if they are not prescribed, performed, or directed by a provider or facility not defined by us as such, or not licensed to do so. Reversal of Sterilization  o Exclude reversal of elective sterilization. Services from Relatives or Members of Immediate Family  o Exclude services (applies to medical and pharmacy services) performed by a provider who is a family member by birth, marriage, or adoption, or by the provider to self. Services Related to Surrogacy  o Exclude services related to surrogacy. Sexual Dysfunction  o Exclude drugs and devices used for the treatment of sexual dysfunction. o Exclude services related to sexual transformations. Smoking Cessation Programs  o Exclude smoking cessation programs that are not affiliated with WellPoint. Standby Physician Charges  o Exclude all standby physician service charges. Unlisted Services  o Exclude services not explicitly listed as covered. Vein Surgery  o Exclude treatments of all varicose and spider vein surgeries for cosmetic purposes. Vision Services  o Exclude the following:  Vision Correction Surgery (e.g. Lasik, radial keratotomy, etc.) to correct refractive error, including near sightedness, far sightedness, and/or astigmatism;  Orthoptics and vision therapy/training; and  Prescription and non-prescription eyewear. o Exclusion does not apply to medical and surgical services for the treatment of injuries and diseases affecting the eye (examples include eye exams for diabetics, eyewear/contacts and related services to replace human lenses following surgery or injury, etc.). 11