EXHIBIT II (a) The total response during initial enrollment period was 49,893. This represented 8.7 percent of the aged population in Massachusetts and a much larger percentage of the effective market. After eliminating returns permitted under the 10-day free-look provision, duplicate applications, etc., the initial enrollment figure proved to be 43,383. This figure which exceeds by a considerable margin the original expectations is divided between the two plans, as follows: Plan I... Plan II. Total..... 32,728 10,655 43,383 (b) At the time of the April 1963 and March 1964 enrollments there were the following numbers insured: April 1963 (including 941 new enrollees during open enrollment period): Plan I.. 31,269 Plan II. 11,401 Total.. 42,670 March 1964 (including 1,305 new enrollees during March enrollment (c) The enrollment activity can be summarized as follows: State premium taxes (estimated). Developmental, promotional, and acquisition costs charged to the 1st policy Percent of premium $6,442, 137 5, 475, 532 100 85 7 MASSACHUSETTS 65 HEALTH INSURANCE ASSOCIATION, Boston, Mass. YOU MUST ACT PROMPTLY TO TAKE ADVANTAGE OF THIS REMARKABLE NEW MAJOR MEDICAL PLAN There are only 10 days left for you to get in on Mass 65, the wonderful new health insurance plan for Massachusetts residents 65 and over. Applications can be accepted only through October 31. If you are 65 or over, or if you are financially responsible for somebody who is, you still have time to apply for this protection if you haven't already done so. As you will recall from the descriptive folder recently mailed to you, Mass 65 pays up to a lifetime maximum of $10,000 for major medical health insurance coverage. It's practically like having a special emergency fund from which you can draw up to $5,000 in any one year to pay the big medical bills that usually result from a major accident or serious illness. Mass 65 begins paying benefits when most basic hospital and surgical plans leave off. It helps pay big bills from your doctor, the hospital, or a convalescent nursing home. And it's easy to take advantage of this plan designed exclusively for Massachusetts residents 65 and over. There's no medical exam required * no health questions asked. When you have the protection Mass 65 gives you, you can enjoy new peace of mind *** lessen your worries about the impact of a serious or prolonged illness or crippling injury. Even if your expenses run into thousands of dollars, and this is not at all unusual, you will be helped substantially in meeting the really staggering bills that can be incurred. Mass 65 major medical protection is the type of coverage that people 65 and over have always needed most, yet have often found extremely difficult to obtain. And now it's available, at low cost, for everybody in Massachusetts 65 and over. But you must not delay. The initial enrollment period for Mass 65 ends October 31, no applications can be accepted after that date. So please call or see your agent or broker today *** before time runs out. He'll gladly answer any questions you might have about the plan, and will help you enroll. Sincerely yours, A. M. WILSON, Chairman, Executive Committee. MASSACHUSETTS 65 HEALTH INSURANCE ASSOCIATION, DEAR SIRS: May we ask your cooperation in supporting the new Massachusetts 65 plan? Will you help us spread the good news about Massachusetts 65-the new major medical health insurance plan for Massachusetts residents 65 and over? The support of prominent people like yourself will help us substantially in making this first enrollment period in October successful. You've probably already heard and read a great deal about Massachusetts 65 and the voluntary association of leading insurance companies behind it. The plan has received widespread and enthusiastic coverage and commentary in the press, radio, and TV. This is not surprising, for Massachusetts 65 presents a dramatic answer to the critical need of older people in Massachusetts for low-cost major medical health protection, at a time they can most benefit-when a serious accident or prolonged illness incurs medical and hospital bills that can run into thousands of dollars. As the enclosed folder about Massachusetts 65 points out, expenses of this extent go far beyond the coverage normally provided by basic hospital-surgical insurance. Yet major medical protection is the type of health insurance people 65 and over have often needed most, yet have usually found most difficult to secure without having to take a medical exam. Massachusetts 65 offers benefits that extend up to $10,000 over a person's lifetime*** for medical and surgical bills, for care in a hospital or convalescent home or even in the individual's own home. The plan was designed exclusively for Massachusetts residents 65 and over, and was actually made possible only through passage of a special State law. If you'd like to cooperate in getting across the important story of Massachusetts 65, you can do so by making copies of the enclosed folder available to those in your community who might benefit from the plan. We'll gladly send you as many folders as you wish-just fill in and return the slip accompanying this letter in the postage-paid envelope provided. And thanks for your help. PRESIDENT, MASSACHUSETTS 65, DEAR SIR: As you may know, the Subcommittee on Health of the Elderly has announced that it will hold public hearings on the subject of Blue Cross and other private health insurance coverage for older Americans. In connection with the preparations for those hearings, it would be very much appreciated if you would forward your responses to the attached questions and requests for material as soon as possible. I have asked Mr. Jay Constantine of the subcommittee staff to cooperate fully with you in the event that you desire further clarification of the information requested. Thank you for your cooperation. Sincerely yours, PAT MCNAMARA, U.S. Senate, Chairman, Subcommittee on Health of the Elderly. 1. All literature describing benefits and premiums, including scripts and tearsheets used in promotion. 2. Total number of different persons enrolled in program from inception to March 1, 1964; total number of persons accepted for coverage during initial "open enrollment" period, total number of persons insured immediately prior to and following each of any subsequent "open" periods; and total number of persons insured as of March 1, 1964. (Please breakdown these data to show subtotals indicating number of different persons in each of your various coverage options.) NOTE. For this and subsequent questions, provide data, to the extent possible, distinguishing between persons age 65 and over and those persons under age 65. 3. How many of those persons accepted for coverage during your initial "open enrollment" period were still insured under the program as of March 1, 1964? 4. What was the average age of the policyholder as of the end of your initial enrollment period? What was the average age as of March 1, 1964? 5. Please provide all data available relating to premiums earned, claims incurred, utilization, etc., for each of the various options and types of coverage. 6. Please provide the details of any premiums and/or benefit changes which have been made in your program since its inception. 7. Advise whether any premium and/or benefit changes are anticipated or will be required during the next 2 years. Explain fully. 3. NEW YORK "65" NEW YORK 65 HEALTH INSURANCE ASSOCIATION, New York, N.Y., April 15, 1964. HON. PAT MCNAMARA, DEAR SENATOR MCNAMARA: The attached information is submitted in response to your letter of March 10 and that of Mr. Constantine dated March 17. Sincerely yours, MORTON D. MILLER, President. Answers to questions outlined in letters of March 10 and 17, 1964, from Subcommittee on Health of the Elderly under the chairmanship of the Honorable Pat McNamara: Question 1. All literature describing benefits and rates, including scripts and tearsheets used in promotion. Answer 1. The following material is enclosed: Initial open enrollment-October 15 to November 15, 1962-Exhibits 1. New York 65 filmstrip and record. 2. Proofs of four newspaper ads. Second open enrollment-June 1-15, 1963 8. Sales aids kit (agents-brokers). 9. Two TV scripts. 10. Inquiry letter. Special enrollment opportunities 11. Agent-broker kit, February 1963. 12. Agent-broker kit, October 1963. This material constitutes the major portion of the promotional material prepared by New York 65 and directed to the general public or the agents and brokers of New York State. Question 2. (a) Total number of different persons enrolled in program from inception to March 1, 1964; (b) total aged persons insured as of March 1, 1964; (c) total number of persons accepted for coverage during initial enrollment period and total number of persons insured immediately prior to commencement of second "open" enrollment period. (Please provide subtotals indicating persons covered for basic only, major medical only, and basic and major medical). Answer 2. (a) The total number of persons who submitted applications for coverage from inception to March 1, 1964 were: Initial "open" enrollment (Oct. 15-Nov. 15, 1962). Interim enrollments (see folder entitled "Special Enrollment Opportunities in New York 65" for eligibility requirements).. 2d "open" enrollment (June 1–15, 1963). Total applications... 107, 404 1, 734 1 33, 552 142, 690 1 In addition, 702 persons who already had some coverage with New York 65 took this opportunity to add additional coverage, as follows: Of the 142,690 applications received by New York 65 from the inception of the program until March 1, 1964, 3,031 applications (2,237 in the initial "open" enrollment and 794 in the second "open" enrollment) could not be processed because the individual was not eligible due to age or nonresidence, or was confined to a hospital or nursing home, or no premium payments were received or the application was incomplete in other respects. Deducting the 3,031 leaves 139,659 applicants to whom certificate booklets were issued of whom 4,980 (3,723 in initial open enrollment and 1, 257 in the second open enrollment) took advantage of the "free look" provision under which an |