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Aon review: SFHSS health plans showed trends below national averages in 2024; specialty drugs and high‑cost cases remain drivers
Summary
Aon presented 2024 experience for SFHSS self‑funded and flex‑funded plans, reporting generally lower-than-national trend increases across Blue Shield and Health Net plans, moderate growth in the non‑Medicare PPO, and continued concentration of spending in a small number of high‑cost claimants and specialty drugs.
Aon lead actuary Mike Clark presented the Health Service Board with a year‑end review of SFHSS self‑funded and flex‑funded plan experience for calendar year 2024 on March 13, saying overall plan trends were modestly below national averages but that specialty pharmacy and high‑cost claimants continue to drive much of the spend.
Clark reviewed results across several plan families: Blue Shield flex‑funded HMOs (which included UnitedHealthcare EPO experience during 2024), Health Net Canopy Care (a capitated product with growing enrollment), the non‑Medicare PPO (Blue Shield/United populations), and the Delta Dental active employee PPO.
Highlights Clark cited included: - Blue Shield HMO/EPO plans: overall increases below national trend; meaningful variability from large claim pooling driven by a handful of expensive cases (premature births, cancer, cardiovascular surgeries). Blue Shield’s pharmacy rebate experience improved, and capitation (physician) components were stable. - Health Net Canopy Care: enrollment growth (driven by single‑tier enrollees and new hires) and a favorable per‑employee per‑month cost profile compared with prior expectations; staff noted demographic and utilization changes will be reflected in future underwriting adjustments. - Non‑Medicare PPO plan: enrollment has grown and the plan now covers roughly 3 percent of total covered lives; large‑claim claimant counts rose but the percentage of members who are high‑cost remained comparable year‑to‑year. - Delta Dental active PPO: claims rose only modestly (about 1–2 percent) and preventive and diagnostic utilization increased, but the plan continues to see substantial out‑of‑network use in some counties and an erosion of PPO participation.
Clark and board members discussed the role of specialty medications — roughly half of total pharmacy spend in recent years — and how those therapies continue to influence trend. Clark noted Blue Shield’s national book‑of‑business data showed higher specialty utilization but that per‑member pharmacy trend for SFHSS was somewhat lower than the prior period.
Board members asked questions about Canopy Care’s demographic mix (a younger, single‑enrollee skew) and about county differences for dental out‑of‑network utilization; Clark said staff will provide county‑level utilization exhibits at future meetings.
No formal action was taken on the presentation; staff said they will return with rate and renewal recommendations in April and May consistent with the rates and benefits calendar.
