Board approves health rate package on first reading after months of scrutiny; calls for greater pricing transparency from Kaiser

The Board of Supervisors considered and approved on first reading a package of ordinances setting health plan contribution rates and Health Service System (HSS) plan details for 2014, following extensive debate about pricing transparency from Kaiser Permanente and the need to protect members’ access to care.

Supervisor Farrell, who represents the City on the HSS board, said the HSS board and budget analysts recommended approving the rates and warned that failing to act would disrupt contracts and open enrollment — potentially forcing tens of thousands of HSS members to change plans. HSS Executive Director Catherine Dodd, who returned from medical leave, told the Board the City's costs would increase only modestly (the City employer portion rising by roughly 0.7%) and that failing to approve rates could leave 108,000 people without coverage come January because contracts would not be signed in time for open enrollment.

Several supervisors and labor representatives pressed Kaiser to increase transparency about underlying price drivers and administrative costs. Supervisor Campos proposed amendments that would direct HSS staff to pursue negotiations with Kaiser, prepare contingency plans, strengthen union and retiree consultation in 2015 objectives, and support state-level transparency bills. Kaiser representatives and unions also met with supervisors and HSS staff during the debate; supervisors said they received commitments from Kaiser to provide more data and to meet about pricing and programmatic changes for next year. The Board approved related ordinance items 35 and 36 on first reading by roll call (11–0) and continued the amended resolution urging Kaiser negotiations (item 71) for further work and a second vote on July 30.