Christina Nyquist

Vice President,

Head of Regulatory Affairs

January 28, 2014

ACA Impact on Retiree Systems

Aetna Inc.

ACA Impact on Retiree Systems

1) Aetna Innovations

2) Insurance Rules

3) Changes to Medicare

2

Aetna Inc.

We are building… the 21st Century Health Care System

3

Consumer tool to research treatments,

find providers and make appointments

Online tools to help consumers managed their health care and wellness

Patient health information exchange

technology

Apps to help physicians connect their own data and

information

Clinical decision support to identify gaps in care

and best practices

Enable ACO-branded insurance products.

Consultation to ensure success

Aetna’s solution is payor agnostic and enables virtual integration

Aetna Inc.

ACA Impact on Retiree Systems

1) Aetna Innovations

2) Insurance Rules

3) Changes to Medicare

4

Aetna Inc.

Issue Impact

Medical Loss Ratio Caps investment in HIT, transparency, wellness, ACOs, fraud prevention and other

core innovations at 15% of large group premiums.

Summary of Benefits and Coverage

The summary of benefits requirement imposes significant administrative burdens

on employers.

Industry estimates are close to $400 million in first two years of implementation.

Constrain ability to explain Tiered Networks and other innovations.

Definition of Full-time Employee

Employers must offer all “full-time” employees “affordable” coverage.

Reporting Requirements

ACA creates multiple new information tracking and reporting requirements for

employers.

Exchanges If states expand Exchanges to large group, ACA requires Exchange rating for all

large groups.

Specialty Populations Expatriate

Mini-med

Key Affordable Care Act Issues for Employers

Aetna Inc.

ACA Impact on Retiree Systems

1) Aetna Innovations

2) Insurance Rules

3) Changes to Medicare

6

Aetna Inc.

ACA Changes to Medicare

• The ACA makes significant cuts to Medicare payments while linking new payments to quality rating measures

• The cost of Medicare and other entitlement programs will continue to rise

7

Medicare

Medicaid & Other

Health Programs

Social Security

Source: CBO

Projected Tax Revenue

Aetna Inc.

Enrollment in Employer Group Medicare Advantage (EGWP) Continues to Rise

0.96

1.3 1.56

1.83 1.92 2.08

2.32 2.53

0.0

0.5

1.0

1.5

2.0

2.5

3.0

May 2006 Nov 2007 Feb 2008 Feb 2009 Feb 2010 Feb 2011 Feb 2012 Feb 2013

Nu

mb

er

of

Enro

llee

s (

Mill

ion

s)

Source: MedPAC Data Book, June 2013.

Number of Employer Group Medicare Advantage Enrollees,

May 2006 – February 2013

In February 2013, 18 percent of all MA enrollees — or 2.5 million

individuals — were in employer group plans.