ACA 2.0: New Eligibles,

New Opportunity,

New Demands Critical Steps to seize & retain the untapped Hispanic & Millennial ACA Exchange Potential

1. 2014 Opportunity, progress & gaps

2. Main barriers to adoption critical to

address

3. An efficient targeting technique to

advance conventional age/language

engagement approaches

4. New customer experience demands

for insurers and hospitals

5. Immediate & Long-Term Tips to

maximize growth and retain share

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About Santiago Solutions Group

• SSG is a growth consulting leader driven by

management P&L experience, Big Data and

predictive analytics.

• We develop fact-based business models,

insights, customer experiences and roadmaps

that profitably segment distinct customer groups

and drive revenue.

• We help clients focus their resources where the

highest ROI opportunities exist and customize

strategies advancing efficient Total Market

growth.

© 2012 Santiago Solutions Group Inc. 2

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Carlos Santiago has been guiding strategic growth rooted on predictive analytics for leading marketers in health & wellness for 13 years. Prior to SSG, Carlos headed segment marketing business units in telecom.

Derene Allen specializes in insights & analytics identifying actionable levers with the highest potential impact for customer experience and brand advocacy.

Bessie Ramírez brings healthcare brand management and product development best practices for the development of strategic plans and implementation roadmaps.

About the Presenters

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Realistic Opportunity Assessment

The opportunity gap for 2014.

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1 in 4

Uninsured eligibles Millennials and Hispanics are

willing to pay above $100* monthly premium to avoid 1% penalty vs. 42% of NH

Currently, 1 in 4 Uninsured Hispanics & Millennials have price expectations aligned with actual Exchange plans options; it’s a good start!

Readiest

Potential

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*Univision Study on ACA participation, Spring 2013.

Q22: If you had to pay a monthly penalty of $[1% of income/12] for not buying health insurance, how much would you be willing to pay

each month to have the health insurance coverage for you and your family to avoid paying the penalty? Margin of Error of +/- 4%

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Of CA’s 1.6M potential (among willing to pay >$100), Hispanics represent 33% & Millennials 43%

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Huge Potential willing to pay still to be realized: 44-50% of the ready opportunity comes from Hisp & Mill

*“Individuals Enrolled in October, November and December, with Subsidy Status, Across Ethnicity” www.coveredca.com, calibrated to

current proportions 19.7% Hispanic and 80.3% NH. *Univision Study on ACA participation, Spring 2013, n=520

Eligible uninsured + IFP 18-64 FPL 139-400 (IFP=Individual & Family Plans)

SSG Opportunity Sizing: Scarborough 2013 Double Base USA + n=281,221

Hisp IFP 278K 18%

HUnIns>$100

240K 15%

NHUnIns>$100 395K 25%

NH IFP 650K 42%

CA Exch Subsidy Eligibles FPL 139-400 Documented:

Uninsured >$100* + IFP (000)

Proj Oppty = 1,563K

= 434K

33%

67%

17%

83%

CA Enrollment Progress &

Upside Potential**

Hispanic NH

16%

84%

Millennial

= 563K

Attained = 349K a/o 12/31

= 84K = 106K

Opp’y Ahead = 696K

Hispanic & Millennials pace of enrollment is 1/2 of NH pace

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Hisp IFP

230K 24%

H UnIns>$

100 121K 12%

NH UnIns>$1

00 278K 28%

NH UnIns>$

100 356K 36%

Hisp IFP 99K 13%

H UnIns>$100

57K 7%

NH UnIns>$100

266K 34%

NH IFP 355K 46%

Projected

Oppty=985K

SSG Analyses of Scarborough 2013 Double Base USA+ *Univision Study on ACA participation, Spring 2013, n=520 1UnIns>$100 refers to people that are willing to pay more than $100/month; IFP = Individual & Family Plans 2Central-So = Central and South Florida only (excludes Tallahassee DMA) 7

31%

Hisp

Share of Exchange

Eligibles In 3

Sample States

Projected

Oppty=777K

TX Central-So2

FL

41%

Mill

Eligible FPL Documented 139-400

UnIns>$100K + IFP*1 (000)

Of Texas ~1M in potential, 36% are Hispanic and 42% are Millennial; of C/So FL’s ~800K ‘ready’ potential, 20% are Hispanic & 35% are Millennial

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Opportunity for savvy Hospitals that master Patient Experience and apply to grab competitors’ share

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H-CAHPS standardizes customers perspectives of care experience1

culminating in Advocacy

Brings Consumers

• Trust In System

• New Currency

• Increased Freedom of Choice

• Cultural Competence To Forefront As Potential Differentiator

Rewards Hospitals with • Loyalty

• Higher ROI

92%

78% 71%

79% 78%

SFSH SD Avg. NationalAvg.

LocalAlternative1

LocalAlternative2

Patients Who Would Definitely Recommend the Hospital to

Friends & Family

1Includes: Communication - Responsiveness – Cleanliness - Customer Advocacy

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Mindset, Cultural Barriers Standing Between Eligibles and Adoption

The main barriers to adoption and which ones to address

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Complex System

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Subsidies

Multiple Brands

New Concepts

Multiple stakeholders

& Subsidies

Metal Program Plan Names

Fragmented process

Complex Enrollment

Federal, state, County government.

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Cultural/

Nuances

Relevant Comm.

Perceived Value

Customer Experience

Hispanics & Millennials face Additional, Interdependent Barriers to Adoption

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Generational

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Hispanic’s Distinct Cultural Nuances

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I didn’t have

health insurance

growing up

Cash is

king!

I feel healthier

than ever

I’m a 27 year old proud Latina Mom…

I have a degree but work 2 part-time service jobs

I love the web, but

prefer transactions in

person

I’m on my

smartphone

24hrs/day

I watch Drop Dead Diva

after my “novela”

I’m

slow to

trust…

Not many

doctors

understand me!

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Millennials: Digital & On-the-go

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Among the uninsured eligible for subsidies,

Millennials are more likely than Total to:

Often under-employed, living with parents

Afraid costs will increase1

Believe “I am my own doctor” and only go to doctor when ill2

Be hyper-connected, hyper-informed, hyper-influenced by SM/video clips

Engage in physical activities, often for socializing2

Sources: 1. Harvard Public Opinion Poll, Dec 2013 2. 2. SSG analyses of 2013 Doublebase GfK-MRI 2013 , N= 50,764

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Relevant Communications are Key in the Exchange

The ACA has overlooked main cultural communication challenges and in-lingual needs of Hispanics.

14 Sources: 1 MRI 2013. 2 The US Department of Health & Human Services. 3

Lackluster in-culture & in-language offering, devoid of consumer insights

Limited in-cultural communication channels

Suboptimal use of marketing tools

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Millennials & Hispanics are Facing Value Choices

The Moya-Baum’s, a typical eligible Millennial couple in their early 30’s

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Los Perez… an Upscale, FPL 250-400 and fully Bicultural/Bilingual

San Antonio, fa. of two,~$36K/yr

Basic plans from $1–4K/yr with fa. deductibles from $4.5–13K/yr

Healthcare expenses last year ~$1,200

Penalty of $360 is better for us!

Los Angeles, fa. of 5, ~$65K/yr

Basic plans from $4–6K/yr with fa. deductibles from $3–10K/yr

Healthcare expenses last year ~$4,000

We’ll deal with the Penalty of $650

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Value & Effective Prospecting

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An efficient targeting technique to advance conventional age/language engagement approaches

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The stated 2014 stated potential will expand 3x

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as insurers effectively recalibrate messages, reinforce offering for the untapped potential, grab competitive share, and create loyalty with base

3 Key Factors Will Play A Role In Expanding The Initial Pool Of Enrollees • Value Perception will improve with prospects • Tax Penalties will decrease consumers value threshold • Competitive Pressures

• Cost-savvy competitors will drive down prices

• Effective offering, messaging, targeting, and delivery will lead to share shifts

Op

po

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nit

y

Time

It’s a marathon,

not a sprint!

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The Challenge: How to acquire & retain new entrants in a smarter way?

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Is there a better mousetrap that leads to increased ROI?

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Targeting Healthy Lifestyle individuals can yield base that increases competitive edge

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Directly resonating and connecting with Healthy Lifestyle individuals enhances

marketing effectiveness over Generational approaches yielding a pool that is

8-20% less likely* to have PCDs relative to age

103

108 104

95

87

94

Millennial Gen X* Boomer*

Index of Preventable Chronic Diseases (PCD) Among Healthy & Unhealthy Lifestyles by Generational Segment

Health Unaware Healthy Lifestyle

8% 10% 19%

100 = Millennial Avg

100 = GenX Avg

100 = Boomer Avg

Individual Healthy Scores

* Statistical significant at 95% confident level 2 SSG Wellness Segmentation™ (powered by GfK MRI) GfK MRI 2013 Double Base , N= 49,970

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Building Customer Intimacy with the Newly Insured

New customer experience demands for insurers and hospitals

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Validation Validation Validation

Purchase (Advocates)

Awareness/ Interest

At each Touch-point of Adoption & Engagement, any “stumbling block” can be disruptive & “scary”

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ACA/ Covered CA

Search for Information

Application & Eligibility

Determination Enrollment

Communication Tools

Distrust Cultural Nuances Perceived Value

Brand Promises

Complexity

Opinion Preference Consideration

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WHAT do I need to do to ensure a more positive customer experience?

Increased Customer Intimacy ensures healthier business growth

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KNOW THY CUSTOMER

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Focus on 2 key fundamentals to ease journey of Hispanic & Millennial eligibles and new enrollees

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SIMPLE

• Reduce customer effort & channel switching by ensuring all links work and explanations are short & to the point

• Understand key drivers of ongoing satisfaction/monitor always

• Simple & clear communications in the language of preference

• Relate terms, look & content to something more familiar (ie. car insurance)

• Create empathy

SMOOTH JOURNEY

CLEAR COMMUNICATIONS

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Strategic Implications

Tips to focus on right now to

maximize growth and retain share

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Overarching sustainable growth strategies to win the ‘Exchange marathon’ as opportunities intensify

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Shift From Thinking Of Patient Pools to Customers while applying Best Practices

Fully understand Total Market similarities & nuances and address them from the outset across functional areas

Ease ACA + your own gaps, by delighting and creating Hispanic & Millennial brand advocates

Integrate Strategies

Experience & Advocacy

Accelerate Customer Centric Transformation

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Create relevant & relatable identity

Revisit network design to ensure culturally competent access

Enable face-to-face, where Hisp & Mill are

Bring mobile solutions

Leverage personal circles of influence-SM

Create identity reflecting community

Secure in-culture and in-language medical

and support staff

Bolster pertinent disease maintenance &

prevention programs

In-person and mobile

Go way beyond H-CAHPS

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Simplicity

Relevance

5 Tips/2 Foundations to improve efficacy of Hispanic & Millennial efforts ‘Here & Now’

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TIME FOR

YOUR QUESTIONS

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Thank You

Subscribe to the SSG monthly Newsletter

www.SantiagoSolutionsGroup.com/subscribe

Follow Santiago Solutions Group

@Carlos_SSG

+1 818.736.5661

www.SantiagoSolutionsGroup.com

@Santiago_Group

We’d like to extend special thanks to Univision for sharing their study

on ACA participation, conducted during Spring 2013.