S.F. Board Approves Kaiser Rate Hike, Calls for More Transparency
On Tuesday, the San Francisco Board of Supervisors unanimously approved Kaiser Permanente's 5.25% rate hike for city workers' health insurance but called for greater transparency of premium increases, the Los Angeles Times' "L.A. Now" reports.
In May, 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. Ghotbi also determined that:
- City workers' use of health care services declined by up to 16% in 2011, while premiums increased by 11% that year; and
- City workers' hospitalizations declined by more than one-third over the past seven years, while Kaiser's charges to hospitals increased by 90% during that time.
In a series of public meetings, HSS and union representatives questioned Kaiser about the increases, but Kaiser officials responded that the requested information was "proprietary."
Peter Andrade -- Kaiser's senior vice president of sales and account management in California -- later apologized for the statement after several members of the city board of supervisors threatened to end the city's more than 60-year relationship with the insurer.
Details of the Board's Decision
The full board approved the increase after determining that denying the rate hike would jeopardize workers' coverage.
The rate hike will affect 45,000 public employees and their families, according to "L.A. Now."
However, the board 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.
Following the decision, the board unanimously approved a separate resolution that calls for Kaiser to begin negotiations with HSS to develop a "fair and transparent pricing model," according to board members. The resolution also requires Kaiser to regularly report to city supervisors on the progress of such negotiations.
In addition, Board Supervisor Mark Farrell -- who also is a member of the HSS board -- said he is working on local legislation that would require insurers to give more detailed information on premium rates.
Meanwhile, board members are supporting a state bill (SB 746) -- by Sen. Mark Leno (D-San Francisco) -- that would require insurers to provide more detailed information on rate hikes for employer-sponsored plans serving 50 or more workers (Romney, "L.A. Now," Los Angeles Times, 7/24).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.