Criticism Mounts Over Kaiser’s Premium Rate Hikes in California
California officials and employers are criticizing recent premium rate hikes by Kaiser Permanente, the AP/Sacramento Bee reports (AP/Sacramento Bee, 7/26).
Background on Rate Hikes
In January, Kaiser increased rates by 9% for about 300,000 policyholders (California Healthline, 2/23).
Meanwhile, Kaiser's premiums for a family plan in Los Angeles have increased 34% in the past five years, the AP/Bee reports (AP/Sacramento Bee, 7/26).
In May, San Francisco Health Service System Deputy Director Lisa Ghotbi found that Kaiser earned $87 million more from city workers' premiums between 2010 and 2012 than it paid for their care.
This month, the San Francisco Board of Supervisors unanimously approved Kaiser Permanente's 5.25% rate hike for city workers' health insurance but also secured a commitment from Kaiser executives to:
- Take several steps to increase transparency of rate hikes; and
- Implement a multi-year "wellness plan" to reduce costs for beneficiaries (California Healthline, 7/25).
Details of Complaints
CalPERS officials say that Kaiser's premiums have increased by 65% since 2007, while Blue Shield of California's rates have increased by 50% during that time and Anthem Blue Cross's rates have increased by 43%.
Meanwhile, Miguel Santana -- a budget official in Los Angeles -- said Kaiser is "not willing to have a discussion about their increases" (AP/Sacramento Bee, 7/26).
Amid the criticisms of Kaiser, numerous state officials have begun supporting a bill (SB 746) that would require insurers to provide more detailed information on rate hikes for employer-sponsored plans serving 50 or more workers (California Healthline, 7/25).
Kaiser officials said that their premiums often are 10% lower than other insurers' rates. In addition, they said that Kaiser already provides employers with detailed data on medical costs.
Kaiser officials also said that the insurer operates differently than other health plans because it collects an up-front premium for care rather than using a fee-for-service model, making it difficult to directly compare its rates with other insurers' prices.
Teresa Stark -- director of government affairs at Kaiser -- said that California officials are "trying to force us to report information in the same fashion as every other health plan," which could jeopardize "everything about Kaiser Permanente that ... make[s] us special" (AP/Sacramento Bee, 7/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.