Kaiser Permanente to Raise Premiums By More Than 10% in 2002

Citing rising health care costs, Kaiser Permanente announced plans last Friday to boost health insurance premium rates by more than 10% in 2002, the Contra Costa Times reports. During the past five years, the HMO has raised premium rates by about 10% per year, and next year's increase will top 10%, although Kaiser Permanente "would not disclose how high rates would go." Kaiser spokesperson Beverly Hayon said that double-digit increases in prescription drug costs, increased use of hospitals, infrastructure improvements and hospital staff shortages have prompted the premium increase. She added that a recent decline in the insurer's net income and a "plateaued" membership in California have contributed to the decision to increase premiums, adding, "We're trying to perform this high-wire act of balancing these extremely high cost pressures and still provide what is the most affordable health care around. It's not easy to do." Although the HMO has "done its best" to control costs, many expenses "can't be avoided," Haylon said. Beth Capell, a lobbyist for Health Access, a coalition of more than 200 community and consumer groups, called Kaiser Permanente's decision to raise premiums "disappointing," pointing out that California employers often pass the costs of premium increases to employees. "If I was making $30,000 and my employer told me this 10 percent rate increase would all get shifted to me, I'd be worried," she said (Silber, Contra Costa Times, 8/4).