MEMORANDUM. Renaming of Numbered Plans: The numbered plans have been renamed as follows and these names are used throughout this memorandum:

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1 1515 Arapahoe Street Tower 1, Suite 410 Denver, CO Phone Fax MEMORANDUM Date: August 29, 2007 To: Board of Directors Re: Calculation of Rate Changes Effective January 1, 2008 From: Liz Leif, FSA The purpose of this memorandum is to provide information regarding the calculation of January 2008 rates for the plans. This document describes the methodology used to calculate the rates. All rates were calculated in accordance with the requirements of RCW The calculation of rates is based on the rates of the five largest individual carriers in Washington. The surveys that form the basis of the identification of the benchmark companies are secured by the Office of the Insurance Commissioner and compiled by Benefit Management, Inc. We presented preliminary January 2008 rates at the board meeting on July 12, The preliminary calculation was based on the five carriers used in last year s study and their December 2005 membership. Subsequent to that meeting, we were able to secure the December 2006 membership. The five carriers remain unchanged, but the change in membership from 2005 to 2006 has the following impact on the calculations: The proposedized carrier weights materially changed from the weights used in the preliminary calculation. Specifically, Regence Blue Shield of Washington changed from the 2005 membership weight of 43.6% of the top five membership to a 2006 weight of 49.1%. The impact of the change in the carrier mix reduced the previously calculated rate increase of 11.5% to an 8.6% rate increase. Renaming of Numbered Plans: The numbered plans have been renamed as follows and these names are used throughout this memorandum: Plan 1 - Standard Plan Plan 3 - Preferred Provider Plan Plan 4 - HSA Qualified Preferred Provider Plan New Plan 5A - Provider Plan A New Plan 5B - Provider Plan B Summary of Rate Calculations Our analysis indicates the need for an average rate increase of 8.6% for the Standard, Preferred Provider Plans and HSA Qualified Plan. Our analysis also indicates the need for an average rate increase of 9.6% for the Medicare plans. We have calculated rates for the two new Provider Plans A and B. We suggest the Board consider the use of smoker/non-smoker rates. We suggest the Board consider whether to continue non-statutory discounts. 1

2 Calculation Methodology for Standard, Preferred Provider and HSA Qualified Plans The rates for Standard, Preferred Provider and HSA Qualified Plans have been calculated using the following methodology: The five companies with the largest individual membership as of December 2006 were: Regence Blue Shield, LifeWise Health Plan of Washington, Group Health Cooperative, Premera Blue Cross, and Regence Blue Cross Blue Shield of Oregon. The individual plan rates and benefits for coverage comparable to s plans were secured from these five companies. s Standard and Preferred Plans have deductible options of, $1,000,, $2,500, and $5,000. Of the five companies, four offer $1,000 and $2,500 deductible plans, while three offer, and $5,000 deductible plans and two offer deductible plans. The new $3,000 HSA-eligible High Deductible Health Plan (HDHP) was developed last year but was not offered in Of the five-benchmark companies, four are offering similar plans with a $2,500 deductible. The rates for this new plan were calculated using the same methodology as the rate development for the other plans. The rates of each carrier were trended from the midpoint of the carrier s current rating period to the midpoint of the rating period beginning January 1, The annual trend rates used for each carrier were determined based on information provided by each carrier regarding current individual plan trend rates. The annual trend rates ranged from 11.4% to 20.4%, with a weighted average annual trend of 13.1%. The average annual carrier trend last year was 12.3%. The trended rates for each of the carriers were adjusted to reflect the actuarial value of differences in benefit design and managed care approach between the carrier s plan and the corresponding nonmanaged care deductible options. The actuarially adjusted rates for the five companies were averaged for each deductible option, using a weighted average based on December 2006 membership. This calculation resulted in the 2008 standard risk rate for each plan design. Benefit changes included in the Standard, Preferred Provider and HSA Qualified Preferred Provider Plan benefits for 2008 and their rate impact are shown in the following table. These changes were approved at the July 12 board meeting. Benefit Category Lifetime benefit maximum Inpatient hospital care Substance abuse outpatient care Preventive care Recommended Average Rate 2007 Benefit 2008 Benefit Impact $1 million $2 million + 0.1% 180 day maximum per year No day maximum + 0.1% 20 visits per year 28 visits per year + < 0.1% $200 maximum per year $400 maximum per year + 0.2% Total Impact + 0.4% The standard risk rates were multiplied by 1.40 for Standard Plan and 1.10 for Preferred Provider Plan to arrive at the proposed 2008 rates. The proposed 2008 rates were compared to the 2007 rates to determine the rate change. The average rate change for each deductible option was determined based on the May 2007 membership in each rate cell. The rate changes within each deductible option of Standard Plan were smoothed to produce a revenue neutral overall rate increase for each option. The rates were then compared to the standard risk rate and modified to ensure that the rates did not exceed statutory maximums or fall below statutory minimums. The rate changes for Preferred Provider Plan were not smoothed since the rates are currently at the minimum rate level. 2

3 The discounted rates for low income members and those who were enrolled in a prior medical benefit during the 63-day period prior to application with continuous enrollment for 18 months in the prior plan or who have been enrolled in for more than 36 months were calculated according to statutory requirements. The resulting rate increases are shown in the following table. Plan Rate Increase Range Average Rate Increase Standard, deductible 2.1% to 2.6% 2.3% Standard, $1,000 deductible 6.8% to 8.2% 7.5% Standard, deductible 5.3% to 8.1% 7.2% Preferred, deductible 3.1% to 3.2% 3.1% Preferred, $1,000 deductible 7.2% to 7.4% 7.3% Preferred, $2,500 deductible 23.7% to 23.8% 23.7% Preferred, $5,000 deductible HSA Qualified, $3,000 deductible 27.2% to 27.3% 22.8% to 25.3% 27.2% 24.6% Overall 8.6% Two new PPO plans ( Provider Plans A and B) were developed. A summary of the plan designs is shown in Exhibit V. Calculation Methodology for Medicare Plans The proposed rates for Plan 2, Basic, and Basic Plus plans were calculated as described below: For the proposed calculations, we used four of the five companies used last year. The five companies with the largest Medicare Supplement membership as of December 2006 were: United Healthcare (AARP), Premera Blue Cross, Regence Blue Shield, Sterling Life Insurance Company, and Mutual of Omaha. Mutual of Omaha replaced State Farm. The Medicare Supplement rates for Plan F were secured from the Washington Office of the Insurance Commissioner, along with the effective date of the current rates. All five of the companies offer Plan F, which is the closest to the medical benefit design of all three plans. The rates of each carrier were trended from the effective date of the current rates to the start of the rating period beginning January 1, The trend rate used was the average annualized rate difference between current rates and those used in last year s rate calculation. This year s trend averaged 8.9%. Last year s carrier average trend was 8%. The trended rates for the five companies were averaged; using a weighted average based on December 2006 membership. The trended average Plan F rate was adjusted to reflect the actuarial value of differences in benefit design between Plan F and the Plan 2, Basic, and Basic Plus plans. The modifications included prescription drug benefits as well as a few minor plan differences such as preventive care. There are also two Basic Plus Low Income plans with different pharmacy benefits that are defined in federal law and indexed each year. The multipliers from Plan F to the plans are shown in the following table: Plan Multiplier Plan Basic Basic Plus BP LI Level BP LI Level

4 The standard risk rates for the five plans are shown in the following table. Plan Rate Plan 2 $ Basic $ Basic Plus $ BP LI Level 1 $ BP LI Level 2 $ The 2005 CMS demographic cost factors were used to develop age-banded rates for Medicareeligible enrollees under age 65. CMS has phased out the use of age/gender factors in favor of a risk adjustment methodology. We suggest retaining the current age factors for the long term. We are not aware of any other published age factors for a disabled Medicare population under age 65. The standard risk rates were multiplied by 1.40 for over age 65 and 1.10 for under age 65 to arrive at the proposed 2008 rates. The discounted rates for those who were enrolled in a prior medical benefit during the 63-day period prior to application with continuous enrollment for 18 months in the prior plan or who have been enrolled in for more than 36 months were calculated according to statutory requirements. These discounts are applied to the over age 65 rates only, since the under age 65 rates are at the statutory minimum multiplier of The resulting rate changes for all Medicare plans (Plan 2, Basic, Basic Plus, BPLI level 1 & Level 2) are shown in the following table, along with the enrollment distribution as of May Plan Rate Change Enrollment Plan % 371 Basic 7.4% 106 Basic Plus 8.8% 411 BP LI Level 1 7.5% 10 BP LI Level 2 8.0% 0 Average 9.6% 898 The increase in the Plan F standard risk rate is 7.3%. The rate increases in plans are greater because the value of the additional benefits has increased at a greater trend rate (especially pharmacy due to the indexing of benefits in Medicare Part D) than the increase in the value of the Plan F Medicare Supplement benefits. Smoker / Non-Smoker Rates As an informational item for the Board, in our review of Standard Plan and Preferred Provider Plans, we observed the rates of all of the top five carriers are categorized as smoker and non-smoker. In producing the rates, we blended each carrier s smoker and non-smoker rates. The smoker/non-smoker blend is 19% / 81%. It is fairly common among high-risk pools to have smoker and non-smoker rates. Our analysis of the smoker/non-smoker rates of the top five carriers, indicate that the smoker rates would be 12.6% above the current blended rate, while the non-smoker rates would be 3% below the blended rates. Applying these smoker/non-smoker factors, smoker rates would be 16.1% greater non-smoker rates. Impact of Bonus Grant is currently the recipient of a CMS bonus grant of $865,000 that is being used to fund premium discounts resulting from the use of multipliers less than the statutory maximum. The bonus grant is in effect from October 2006 through March 2008 or whenever the funds are exhausted, whichever comes first. The reduced multipliers are shown in the following table: 4

5 Plan Statutory Maximum Currently Used Standard Preferred Provider Medicare Plans The following table shows the financial impact of the discounts in the six months ending March Plan Quarter Month Medicare 65+ Standard Plan Preferred Provider Plan Total Cumulative % of Total Bonus Grant 4Q 06 Oct-06 $0 $25,218 $41,475 $66,693 $66, % Nov-06 $0 $25,331 $43,130 $68,461 $135, % Dec-06 $0 $25,037 $44,696 $69,733 $204, % 1Q 07 Jan-07 $2,819 $24,066 $44,211 $71,096 $275, % Feb-07 $2,746 $23,710 $44,552 $71,008 $346, % Mar-07 $2,746 $23,386 $46,268 $72,399 $419, % At the current rate of depletion, the bonus grant funds will be exhausted by the fourth quarter of The Board may want to consider whether the reduced multipliers should be continued into 2008 in the absence of CMS grant funding. Exhibits The following exhibits are attached: Exhibit I Premium Scenarios Exhibit II Plan 2, Basic, and Basic Plus Enrollment Distribution by Multiplier Exhibit III Standard and Preferred Provider Plans Enrollment Distribution by Multiplier Exhibit IV Proposed 2008 Rates for Standard, Preferred Provider, HSA Qualified Preferred Provider, Provider Plan A and B, Medicare Supplement Plans 2, Basic, and Basic Plus Exhibit V Provider Plan A and B Plan Designs 5

6 Exhibit I Premium Scenarios Estimated Monthly Premium Using May 2007 Membership, 2007 Rates and 2008 Proposed Rates Scenario Plan Max Multiplier 2007 Premium 2008 Premium % Change $ Change 2007 Approach Standard Plan 1.40 $335,498 $352, % Preferred Provider Plan 1.10 $854,927 $940, % Plan $187,512 $207, % Basic Plus * 1.40 $139,341 $151, % Basic 1.40 $21,420 $23, % Monthly Total $1,538,698 $1,675, % $136,380 Annual Total $18,464,376 $20,100, % $1,636,557 Maximum Standard Plan 1.50 $335,498 $378, % Preferred Provider Plan 1.25 $854,927 $994, % Plan $187,512 $208, % Basic Plus 1.50 $139,341 $152, % Basic 1.50 $21,420 $23, % Monthly Total $1,538,698 $1,756, % $218,014 Annual Total $18,464,376 $21,080, % $2,616,165 * Includes Basic Plus Level 1 and 2 Premium Note: These projections do not reflect the impact of price elasticity. For every 10% increase in rate, it can be assumed that membership goes down by 3.94%. 8/29/2007 Leif Associates

7 Exhibit II 2008 Plan 2, Basic, and Basic Plus Enrollment Distribution by Multiplier May 07 Membership Plan 2 Membership 2007 Multiplier Basic Plus Membership 2007 Multiplier Basic Membership 2007 Multiplier Under Total Under Total Under Total Under Total Under Total Under Total Basic Plus Low Income Levels 1 and 2 Membership Under Total Multiplier Combined Membership 2007 Multiplier Under Total Under Total Under Total /29/2007 Leif Associates

8 Exhibit III 2008 Plans 1 and 3 Enrollment Distribution by Multiplier May 07 Membership Plan 1 Membership Plan Full Premium 18 Mo Prior 36 Mos Cont 18 Mo+36 Mo LI < 250% LI >250% Total $1, Total Multiplier Plan Full Premium 18 Mo Prior 36 Mos Cont 18 Mo+36 Mo LI < 250% LI >250% Total $1, Total Plan 3 Membership Plan Full Premium 18 Mo Prior 36 Mos Cont 18 Mo+36 Mo LI < 250% LI >250% Total $1, $2, $5, Total , Multiplier Plan Full Premium 18 Mo Prior 36 Mos Cont 18 Mo+36 Mo LI < 250% LI >250% Total $1, $2, $5, Total Combined Membership Plan Full Premium 18 Mo Prior 36 Mos Cont 18 Mo+36 Mo LI < 250% LI >250% Total Plan Plan ,842 Total , Multiplier Plan Full Premium 18 Mo Prior 36 Mos Cont 18 Mo+36 Mo LI < 250% LI >250% Total Plan Plan Total /29/2007 Leif Associates

9 Standard, Preferred Provider, HSA Qualified Preferred Provider Plans and Provider Plans "A" and "B" January 2008 Rates Exhibit IV Basic Rates $1,000 Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $1, % $ % $ % $ % $1, % $1, % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $1, % $ % Provider Plan A Provider Plan B $1,000 $2,500 $5,000 Child $ % $ % $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % $ % $ % 65+ $1, % $1, % $ % $ % $ % $ % Low Income $1,000 Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % <251% FPL $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 Child $ % $ % $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % $ % $ % 65+ $1, % $1, % $ % $ % $ % $ % $1,000 Standard Plan Plan 1 AGE Rate % SRR Rate % SRR Rate % SRR HSA Qualified Preferred Provider Plan Rate % SRR Low Income Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % 251% - 300% FPL $ % $ % $ % $ % $1, % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 Preferred Provider AGE Rate % SRR Rate % SRR Rate % SRR Rate % SRR Plan 5A Rate % SRR Plan 5B Rate % SRR 8/29/ Leif Associates

10 Standard, Preferred Provider, HSA Qualified Preferred Provider Plans and Provider Plans "A" and "B" January 2008 Rates Exhibit IV Enrolled in prior medical benefit plan during the 63-day period prior to application with continuous enrollment for 18 months in the prior plan $1,000 Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $1, % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 Low Income $1,000 Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % <251% FPL $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 $1,000 Standard Plan Plan 1 AGE Rate % SRR Rate % SRR Rate % SRR HSA Qualified Preferred Provider Plan Rate % SRR Low Income Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % 251% - 300% FPL $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 8/29/ Leif Associates

11 Standard, Preferred Provider, HSA Qualified Preferred Provider Plans and Provider Plans "A" and "B" January 2008 Rates Exhibit IV Enrolled in Pool for more than 36 months $1,000 Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 Low Income $1,000 Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % <251% FPL $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 $1,000 Standard Plan Plan 1 AGE Rate % SRR Rate % SRR Rate % SRR HSA Qualified Preferred Provider Plan Rate % SRR Low Income Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % 251% - 300% FPL $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 8/29/ Leif Associates

12 Standard, Preferred Provider, HSA Qualified Preferred Provider Plans and Provider Plans "A" and "B" January 2008 Rates Exhibit IV Enrolled in the Pool for more than 36 months and had 18 months continuous enrollment in the prior plan $1,000 Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 Child $ % $ % $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % $ % $ % 65+ $1, % $1, % $ % $ % $ % $ % Low Income $1,000 Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % <251% FPL $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 $1,000 Standard Plan Plan 1 AGE Rate % SRR Rate % SRR Rate % SRR HSA Qualified Preferred Provider Plan Rate % SRR Low Income Child $ % $ % $ % $ % <25 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % 251% - 300% FPL $ % $ % $ % $ % $ % $ % $ % $ % $1, % $1, % $ % $ % 65+ $1, % $1, % $ % $ % $1,000 $2,500 $5,000 8/29/ Leif Associates

13 Exhibit IV Plan 2, Basic, and Basic Plus January 2008 Rates Full Premium Enrolled in prior medical benefit plan during the 63-day period prior to application with continuous enrollment for 18 months in the prior plan Enrolled in Pool for more than 36 months Enrolled in Pool for more than 36 months and had 18 months continuous enrollment in the prior plan Plan 2 AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR 0-34 $ % 0-34 $ % 0-34 $ % 0-34 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % (1) 65+ $ % (1) 65+ $ % (1) 65+ $ % (1) 65+ $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % (3) 65+ $ % (3) 65+ $ % (3) 65+ $ % (3) 65+ $ % Basic Plus AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR 0-34 $ % 0-34 $ % 0-34 $ % 0-34 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % (1) 65+ $ % (1) 65+ $ % (1) 65+ $ % (1) 65+ $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % (3) 65+ $ % (3) 65+ $ % (3) 65+ $ % (3) 65+ $ % Basic Plus AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR Low Income Level $ % 0-34 $ % 0-34 $ % 0-34 $ % Below 135% of FPL $ % $ % $ % $ % Assets < $6K $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % Basic Plus AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR Low Income Level $ % 0-34 $ % 0-34 $ % 0-34 $ % Below 150% of FPL $ % $ % $ % $ % Assets $6K to $10K $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % Basic AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR AGE RATE % SRR 0-34 $ % 0-34 $ % 0-34 $ % 0-34 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % (1) 65+ $ % (1) 65+ $ % (1) 65+ $ % (1) 65+ $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % (2) 65+ $ % (3) 65+ $ % (3) 65+ $ % (3) 65+ $ % (3) 65+ $ % (1) Full premium (2) Discounted rates for members with incomes below 251% FPL (3) Discounted rates for members with incomes 251% to 300% FPL 8/29/2007 Leif Associates

14 Exhibit V New Plan Designs 2008 New New General Policy Provisions 1 Annual deductible 2 Coinsurance (in network) 20% 20% 3 Annual coinsurance maximum (in network) $2,500 $5,000 4 Prescription drugs: Co-Pays $10/30%/50% $10/30%/50% Annual Maximum $3,000 per year limit $2,000 per year limit 5 Lifetime benefit maximum $2 million $2 million Inpatient Hospital Care 6 Medical/surgical 20%, no day limit 20%, no day limit 7 Mental health 20%, 30 days max per year 20%, 30 days max per year 8 Substance abuse 20%, 30 days max per year 20%, 30 days max per year Outpatient Hospital Care 9 Emergency room 20% 20% 10 Outpatient surgery 20% 20% 11 Mental health 20%, 20 visits per year 20%, 20 visits per year 12 Substance abuse 20%, 28 visits per year 20%, 28 visits per year 13 Physical, occupational and speech therapy 20% up to 30 visits per year 20% up to 20 visits per year Physician Care 14 Office visits 20% 20% 15 Other physician care 20% 20% Preventive Care 16 General $400 maximum per year $400 maximum per year 17 Immunizations 20% 20% 18 Screenings 20% 20% 19 Exams 20% 20% Other Services 20 Acupuncture 20%. 12 visits per year 20%. 8 visits per year 21 Ambulance 20%. $2,000 max per year 20%. $2,000 max per year 22 Chiropractic 20%. 10 visits per year 20%. 10 visits per year 23 Durable medical equipment 20%, $2,500 max per year 20%, $2,500 max per year 24 Home health care 20%, 130 visits per year 20%, 130 visits per year 25 Hospice care 20% 20% 26 Maternity care 20% Not covered 27 Skilled nursing facility 20%, 60 days per year 20%, 30 days per year 8/29/2007 Leif Associates