One of our top priorities is to offer employer groups and individuals access to a wide range of coverage options at an affordable price, while encouraging the use of high-quality, low-cost providers.

To achieve these goals, effective on or after January 1, 2011 for new sales, and on anniversary for renewing customers, we will be applying two levels of hospital benefits to 11 of our standard plans.

Members in these plans will have an opportunity to control their share of medical costs every time they get hospital services. This new feature is called Hospital Choice Cost Sharing. With Hospital Choice Cost Sharing, members may pay more or less for their care depending on which hospital they visit:

• Lower Cost Share ($) — Applies to hospitals that have met our quality benchmarks and are lower cost. Members pay less when they get care at these hospitals.
  
  
• Higher Cost Share ($$) — Applies to hospitals that have met our quality benchmarks and are higher cost. Members pay more when they get care at these hospitals.

These costs apply to services such as: admissions for maternity care or surgery, day surgery, labs and X-rays, outpatient physical, occupational, and speech therapy, as well as MRIs, CT Scans, and other radiology services. The higher hospital cost share does not apply to emergency room services.

We believe this approach provides powerful incentives for members to be deliberate in their choice of providers and can help to change the way the health care system works.

Higher Cost Share Hospitals
The hospitals listed below are the Massachusetts hospitals for which member cost shares will be higher. These higher cost share hospitals are the same as those hospitals in the Basic Benefits Tier in our Blue Options plan designs.

• Baystate Medical Center
• Berkshire Medical Center
• Brigham and Women's Hospital
• Cape Cod Hospital
• Caritas St. Anne's Hospital
• Children's Hospital Medical Center
• Cooley Dickinson Hospital
• Dana-Farber Cancer Institute
• Fairview Hospital
• Harrington Memorial Hospital
• Massachusetts General Hospital
• North Shore Medical Center — Salem Campus
• North Shore Medical Center — Union Campus
• South Shore Hospital
• Sturdy Memorial Hospital
• UMass Memorial Medical Center — Memorial Campus
• UMass Memorial Medical Center — University Campus

All other network hospitals will carry the lower cost share, including network hospitals outside of Massachusetts.

Impacted Plans and Employer Options

Employers with 50 or Fewer Employees
These changes are being made to the standard individual/small group plans listed below, however, individuals and small groups have a choice to maintain a single-level hospital benefit. Impacted plans are:

• HMO Blue^® $2,000 Deductible
• HMO Blue New England $1,000^SM Deductible
• HMO Blue New England $500 Deductible
• HMO Blue New England Premier Value
• HMO Blue New England Premier Value with Co-Insurance
• HMO Blue New England Value Plus
• HMO Blue New England Enhanced Value
• Access Blue Basic^SM $2,000
• Preferred Blue PPO^SM $1,000 Deductible
• Preferred Blue^SM PPO $2,000 Deductible
• Preferred Blue PPO Basic $2,000 Deductible

Groups with More Than 50 Employees
We will not be incorporating the Hospital Choice Cost Sharing for our standard large group plans, however, large groups will have the option to include these benefits starting with January 1, 2011 renewals and new sales.

For More Information
If you have questions, or to learn more about differential cost sharing, please contact your account executive.