KAISER PERMANENTE: Managed Care Plan Rescinds Fee Hike
"In one of the rare instances of an HMO rescinding a fee hike," Kaiser Permanente will refund a premium rate increase to about 600 retired California teachers, the Contra Costa Times reports. The rate increase raised premiums from $180 a month to $501 in some cases. The 600 retirees received notices last August informing them that Kaiser Permanente was increasing rates to more closely reflect Medicare reimbursement levels. However, none of the affected retirees are Medicare beneficiaries. "I was angry, very angry," said Barbara Hall of Walnut Creek, whose monthly rate jumped by $320. Kaiser Permanente spokesperson Lila Petersen said, "We don't want to leave senior citizens in this position of getting a huge rate increase, because they just can't afford it." She added that the retirees' reimbursement checks "should go out in the next couple of days." Although Kaiser Permanente backpedaled on the rate hike, the underlying problem leading to the increase has not been resolved: An estimated 22,000 of California's retired teachers are not eligible for the free federal Medicare program because their pension plan -- CalSTERS -- didn't join the Social Security program when they were working in the 1950s and 1960s. As a result, the retirees must buy into Medicare, at a cost which exceeds $300 per month. Ed Ely, a spokesperson for the California Retired Teachers Association, said, "Some of these folks have worked for 30 years in the classroom, and now they're desperate for health care." Last year, Kaiser Permanente administrators realized that many of its members, who were retired teachers and had not bought into Medicare, were paying the same premiums as those who were paying for Medicare. Kaiser Permanente, which has been the sole HMO offering coverage to seniors who lack Medicare, plans to persuade as many retirees as possible to buy into Medicare and look for other ways to keep premiums affordable, without spreading the cost of subsidizing the affected members to other enrollees. Ray Durke, vice president of sales and account management at Kaiser Permanente, said, "What we've done is try to provide coverage. We can't ask a self-paying group to subsidize another part of the group" (McMillan, 2/9).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.