KAISER PERMANENTE: HIPC Okays 14% Rate Increase
The Health Insurance Plan of California, a state "program that provides health insurance for small businesses," has given Kaiser Permanente a rate increase of up to 14%, the Los Angeles Times reports. "HIPC purchases health insurance on behalf of about 8,000 California companies with fewer than 50 workers and serves 137,000 employees" in an effort to use its purchasing power to make "medical insurance more affordable for small businesses." The Times notes that HIPC has been largely successful in keeping costs down for its members, but is currently facing the highest rate hikes since 1993 in the wake of rising medical and drug costs for HMOs. While the premium for Kaiser is much higher than HIPC's "average premium increase of 4.3% for 20 health plans for the 1998-99 year," the Times reports that the "figure is somewhat misleading because significantly higher rate hikes are being imposed on far more workers." Kaiser, which carries 37% of HIPC enrollees, will get an increase of between 11.5% and 14%. The Times reports that "[o]ther large rate hikes went to Pacificare Health Systems (8%), Health Net (8%) and Cigna (15%)." Blue Shield of California and Aetna U.S. Healthcare received "modest 2% increases." John Grgurina, chief deputy director of the California Managed Risk Medical Insurance Board, which administers HIPC, said, "We have several success stories, but we're obviously not pleased with the Kaiser rate increase." However, he predicted that Kaiser would lose enrollees due to the increase because "employees of small businesses tend to gravitate to the lowest-priced medical plans" (Olmos, 4/26).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.