Virginia Health Insurance Market Insights 2024

Gain insights into Virginia's health insurance market trends and key issues for 2024. Explore carrier rates, market shares, and enrollment projections. Confidential data provided. Images and data source in schema format.

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1. STATE CORPORATION COMMISSION BUREAU OF INSURANCE Updated slide deck subsequent to the 2024 ACA Rates Presentation to account for a budgeted 2024 Commonwealth Health Reinsurance Program October 11, 2023

2. Welcome and Introduction Alexander Skirpan, Chief Hearing Examiner, State Corporation Commission (SCC) Broad Overview of Virginia s Individual and Small Group Health Insurance Markets and Key Issues Julie Blauvelt, Life & Health Division Deputy Commissioner, SCC Bureau of Insurance PRESENTATION OVERVIEW Discussion of Key Observations Virginia s Individual and Small group Health Insurance Rates David Shea, Health Actuary, SCC Bureau of Insurance Presentation of Carriers Rates Carrier Presenters Closing Alexander Skirpan Confidential

3. NUMBER OF CARRIERS IN VIRGINIA IN THE INDIVIDUAL MARKET - ON AND OFF EXCHANGE 16 14 12 10 8 12 12 12 6 9 9 8 4 2 2 2 1 1 1 1 0 2019 2020 2021 2022 2023 2024 projected * Off Exchange Only On and Off Exchange *2024 QHP applications received through SERFF Confidential

4. Number of Carriers in County/City Percentage of Counties/ Cities 2024 Individual Market On Exchange - Carrier Service Area Applications As of 8/1/2023 0 1 2 3 4 5+ 0% 0% 13% 44% 12% 31% Confidential

5. VIRGINIA INDIVIDUAL MARKET SHARE BY 2024 PROJECTED COVERED LIVES 1 50% 45% 40% 36.7% 35% 30% 25% 20% 14.1% 15% 10.7% 9.6% 8.4% 7.5% 10% 5.4% 2.6% 5% 1.9% 1.9% 0.5% 0.4% 0.3% 0.0% 0% HealthKeepers Cigna Sentara Health Plans Kaiser Optimum Choice Innovation Hlth Plan Piedmont HMO Aetna Life Aetna Health CareFirst Anthem Oscar GHMSI Sentara Health Ins Co 1 Covered lives based on carrier projected member months submitted in the carrier Virginia Rate Filing Templates Confidential

6. VIRGINIA INDIVIDUAL ACA TOTAL ENROLLMENT AND WEIGHTED AVERAGE PREMIUM PMPM 2019 2024 450,000 $700.00 $657.97 $588.87 $580.97 $569.58 $600.00 400,000 381,859 $495.26 $500.00 354,041 $483.15 350,000 $400.00 301,238 $300.00 300,000 269,760 259,721 $200.00 246,842 250,000 $100.00 200,000 $0.00 2019 2020 2021 Weighted Average Premium PMPM 2022 2023 as of 3/1/23 2024 Projected Enrollment Source: 2022 and prior - Experience period data submitted in carrier ACA filings. 2019 and 2020 exclude data from Virginia Premier with approx. 5000 members. 2022 data excludes Bright Health. 2023 and 2024 - projected PMPM premium and enrollment from carrier ACA filings, actual 3/1/2023 enrollment for 2023. Confidential

7. The General Assembly directed the SCC to apply for a waiver that provides federal funding to Virginia to largely support a reinsurance program for the individual ACA market. CMS approved the program for up to 5 years beginning in 2023. REINSURANCE PROGRAM WAIVER APPLICATION The program reduces health carriers costs, reducing premiums. Persons who purchase individual coverage but do not receive federal subsidies (APTCs) benefit the most from the program. The law sets the goal of the program to decrease premiums by up to 20% depending on available revenue. The SCC relies on the General Assembly money committees to target the level of funding Virginia will contribute to the program. For 2023, legislators selected a 15% premium reduction target with an estimated cost to Virginia of about $69 million. Confidential

8. The 2023 program targeted a 15.6% weighted average premium PMPM reduction. Federal agencies granted approval of the program that pays a portion of expensive claims using a combination of state and federal funds. Estimated federal funds: $331,877,124 Estimated Virginia funds: $43,424,482 Reinsurance program parameters set by SCC reduced the 2023 weighted average premium PMPM 17.3% from what it would have been with no reinsurance. From 2022 to 2023, the weighted average premium PMPM decreased 13%. 2023 REINSURANCE PROGRAM Confidential

9. An actuarial study* found that many people continued to purchase individual coverage in Virginia without federal advance premium tax credits. This raises the projected state costs for the program. The Budget Bill enacted during the 2023 Special Session I directs the Bureau of Insurance to continue the Commonwealth Health Reinsurance Program in plan year 2024 with a target for premium reduction of 15%. Our actuarial study* estimates that such a program will cost the state approximately $66.4 million. Virginia could expect to receive more than $350 million in Federal funds for a program of that size. For more information, go to: https://scc.virginia.gov/pages/Reinsurance-Program 2024 REINSURANCE PROGRAM * Oliver Wyman 2024 Reinsurance Modeling Results, April 14, 2013 funded by a grant from U.S. Health and Human Services Confidential

10. ARPA ACA SUBSIDIES Confidential

11. 2023 MARKETPLACE OPEN ENROLLMENT PERIOD Average Premium after APTC among Consumers Receiving APTC Number of Consumers with a Marketplace Plan Section Consumers with APTC Average Premium 346,140 304,469 $485 $86 The 2023 Open Enrollment Period for the Health Insurance Marketplaces ran between November 1, 2022 and January 15, 2023 for the 33 states that used HealthCare.gov. Source: 2023 OEP State-level Public Use File at www.cms.gov Confidential

12. VIRGINIA SMALL GROUP ACA TOTAL ENROLLMENT AND VIRGINIA SMALL GROUP ACA TOTAL ENROLLMENT AND WEIGHTED AVERAGE PREMIUM PMPM 2019 WEIGHTED AVERAGE PREMIUM PMPM 2019 2024 2024 400,000 $700.00 $651.66 $609.59 $600.00 $555.29 375,000 $544.61 $510.94 $494.74 $500.00 350,000 343,166 $400.00 322,928 325,000 309,572 $300.00 303,969 303,794 296,615 300,000 $200.00 275,000 $100.00 250,000 $0.00 2019 2020 2021 Weighted Average Premium PMPM 2022 2023 as of 3/1/23 2024 Projected Enrollment Source: 2022 and prior - premium and enrollment from experience period data submitted in carrier ACA filings. 2023 and 2024 - projected PMPM premium and enrollment from carrier ACA filings, actual 3/1/2023 enrollment for 2023. Confidential

13. The individual market continues to show signs of a healthy market o Increased carrier participation/competition o At least two carriers in all areas of Virginia o ARPA subsidies increasing enrollment o Medicaid unwinding adding enrollment to the commercial market The Reinsurance Program was effective in 2023 at reducing weighted average premium PMPM 17.3% from what it would have been without reinsurance. Company rate filings project the Reinsurance Program for 2024 will reduce weighted average premium PMPM 16.4% from what it would have been without reinsurance, and 2.4% from 2023 rates. Small group market facing some challenges More study of this market KEY TAKEAWAYS Confidential

14. 2024 RATE IMPACT OF REINSURANCE 2024 average market-wide rate adjustments for reinsurance ranged from 8.5% to -3.7%. The 2024 weighted average premium PMPM prior to reinsurance was projected to increase 16.6% from 2023; after reinsurance, the 2024 weighted average premium PMPM is projected to decrease 2.4% from 2023. The 2024 weighted average premium PMPM prior to reinsurance is $577.63; the 2024 weighted average premium PMPM after reinsurance is $483.15. Confidential

15. Top Premium Drivers* INDIVIDUAL (3.9%) Reinsurance: 1.2% Risk Adjustment: 7.5% Experience: -7.0% SMALL GROUP (5.1%) Experience: -4.7% Increase in Benefits: 1.4% 2024 PREMIUM DRIVERS *Percentages based on a straight average. Confidential

16. VIRGINIA 2024 ACA PRICING TRENDS Individual INPATIENT Cost 7.4% 2.5% 10.1% 1.9% 3.8% 1.0% OUTPATIENT Cost 7.8% 2.5% 10.5% 2.2% 5.7% 3.6% 1.0% PHYSICIAN Cost 1.8% 2.5% 0.6% 3.2% 3.6% 1.0% Rx Util 1.2% 3.8% Carrier Cigna Util Total Util Total Util Total 4.3% 3.8% 4.6% Cost 6.9% 4.8% 10.4% 0.1% 10.5% Total 8.2% 8.8% TOTAL 8.3% 5.7% 6.2% Optimum Choice Sentara Health Plans 3.6% 5.8% 4.6% 8.0% 4.6% Small Group INPATIENT Cost 3.3% 4.4% 1.0% OUTPATIENT Cost 3.3% 4.4% 4.8% 1.0% PHYSICIAN Cost 3.3% 4.4% 3.0% 1.0% Rx Util 4.4% Carrier Util Total 7.8% 4.0% Util Total 7.8% 5.8% Util Total 7.8% 4.0% Cost 3.3% 10.4% 0.1% 10.5% Total 7.8% TOTAL 7.8% 6.0% Optimum Choice Sentara Health Plans 3.0% Confidential

17. ACA LOSS RATIO EXPERIENCE ACA Historical Data in Virginia 100.0% 84.1% 84.1% 83.4% 82.0% 81.4% 80.9% 79.8% 79.3% 78.8% 76.7% 80.0% 71.3% 65.6% 60.0% 40.0% 20.0% 0.0% 2019 2020 2021 2022 2023 (est.) 2024 (est.) Individual Small Group Source: Historical and projected carrier experience data submitted in the annual carrier ACA rate filings Note: 2020 and 2021 data excludes Virginia Premier, 2022 excludes Bright Health Confidential

18. VIRGINIA INDIVIDUAL AVERAGE* RATE CHANGE Percentage Change Over Prior Year 50.0% 25.0% 15.6% 0.0% -2.4% -3.7% -5.0% -9.1% -13.0% -25.0% 2019 2020 2021 2022 2023 2024 est. Source: Average change in approved Calibrated Plan Adjusted Index Rates, annual carrier ACA rate filings *Percentages based on a straight average for 2019-2022 and a weighted average premium PMPM for 2023-2024. Confidential

19. 2024 rate changes for individual reflect the continuation of the reinsurance program, while small group rate changes are similar to past years Pricing trends saw a slight increase, driven by cost of hospital services and prescription drugs Collectively, carriers estimate a 10% increase in individual enrollment in 2024 and a slight increase in small group KEY TAKEAWAYS Confidential

20. PRESENTING COMPANIES Cigna Health and Life Insurance Company - Individual Optimum Choice, Inc. Individual and Small Group Sentara Health Plans Individual and Small Group Note: Company presentation data is from Tab VIII of the Virginia ACA Rate Filing Templates submitted as of 8/1/23 Confidential

21. Enrollment, morbidity and premium impact of eliminating the tobacco surcharge ISSUES TO BE ADDRESSED ISSUES FOR THE PRESENTING COMPANIES TO ADDRESS Enrollment and morbidity impact of Medicaid unwinding Change in trends post-COVID and how they compare to pre-COVID and during COVID (Sentara Health Plans only) Reasons behind Sentara s name change Confidential

22. CIGNA HEALTH AND LIFE INSURANCE COMPANY INDIVIDUAL Presenter: Cathy Wang, Actuarial Advisor Confidential

23. OPTIMUM CHOICE, INC. INDIVIDUAL Presenter: Katherine Simon Director of Actuarial Services Confidential

24. OPTIMUM CHOICE, INC. SMALL GROUP Presenter: Katherine Simon Director of Actuarial Services Confidential

25. SENTARA HEALTH PLANS INDIVIDUAL Presenter: Margaret Chance, Principal and Consulting Actuary Confidential

26. SENTARA HEALTH PLANS SMALL GROUP Presenter: Margaret Chance, Principal and Consulting Actuary Confidential

27. AETNA HEALTH, INC. INDIVIDUAL Confidential

28. AETNA HEALTH, INC. SMALL GROUP Confidential

29. AETNA LIFE INSURANCE COMPANY INDIVIDUAL Confidential

30. AETNA LIFE INSURANCE COMPANY SMALL GROUP Confidential

31. ANTHEM HEALTH PLANS OF VIRGINIA, INC. INDIVIDUAL Confidential

32. ANTHEM HEALTH PLANS OF VIRGINIA, INC. SMALL GROUP Confidential

33. CAREFIRST BLUECHOICE, INC. INDIVIDUAL Confidential

34. CAREFIRST BLUECHOICE, INC. SMALL GROUP Confidential

35. GROUP HOSPITALIZATION & MEDICAL SERVICES, INC. INDIVIDUAL Confidential

36. GROUP HOSPITALIZATION & MEDICAL SERVICES, INC. SMALL GROUP Confidential

37. HEALTHKEEPERS, INC. INDIVIDUAL Confidential

38. HEALTHKEEPERS, INC. SMALL GROUP Confidential

39. INNOVATION HEALTH INSURANCE COMPANY SMALL GROUP Confidential

40. INNOVATION HEALTH PLAN, INC. INDIVIDUAL Confidential

41. INNOVATION HEALTH PLAN, INC. SMALL GROUP Confidential

42. KAISER FOUNDATION HEALTH PLAN OF THE MID-ATLANTIC STATES, INC. INDIVIDUAL Confidential

43. KAISER FOUNDATION HEALTH PLAN OF THE MID-ATLANTIC STATES, INC. SMALL GROUP Confidential

44. OSCAR INSURANCE COMPANY INDIVIDUAL Confidential

45. PIEDMONT COMMUNITY HEALTHCARE HMO, INC. INDIVIDUAL Confidential

46. PIEDMONT COMMUNITY HEALTHCARE HMO, INC. SMALL GROUP Confidential

47. PIEDMONT COMMUNITY HEALTHCARE, INC. SMALL GROUP Confidential

48. SENTARA HEALTH INSURANCE COMPANY INDIVIDUAL Confidential

49. SENTARA HEALTH INSURANCE COMPANY SMALL GROUP Confidential

50. UNITEDHEALTH CARE INSURANCE COMPANY SMALL GROUP Confidential

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