Kaiser Permanente To Change Pricing System for Employers
Kaiser Permanente will change its pricing structure in 2007 to specifically account for treatment information for plan members and determine rates in a way similar to other HMOs, the Sacramento Business Journal reports.
Previously Kaiser did not pay claims in its integrated system and based rates on an employer's volume and use of medical services. The new system will provide specific information about how an employer's premiums are used and future rates are calculated.
The new pricing structure will take effect in 2007 for all employers with more than 50 workers. Rates for employers with more than 1,000 employees will be based on how much they spent on past claims, with some exceptionally high claims excluded.
David Henka, executive account manager for Kaiser's business unit for CalPERS, said employers with more than 1,000 workers will be most vulnerable to rate changes.
Insurance broker Tom Sher said, "Some renewals -- notably public employees and some private-sector unions with lots of retirees -- may receive significantly higher rates as a result" of the new system (Robertson, Sacramento Business Journal, 5/5).