SFHSS hears 2023 plan experience and approves 10‑county survey as context for 2025 rates

At its March 14 meeting the Health Service Board received a detailed financial briefing on 2023 plan experience and approved a 10‑county rate‑survey package to inform 2025 rate negotiations.

CFO Iftikhar Hussain told trustees that claims for the trust were running higher than expected and that the January 1, 2024 rate adjustments (about a 10.1% average increase across plans) had begun to take effect. Hussain said pharmacy spending rose significantly last year; higher rebates helped but did not offset claim increases. "The claims are running higher than planned," he said, noting that prior year rates were applied for part of the experience period and that the January rate adjustments were reflected going forward.

Aon actuary Mike Clark presented the 10‑county comparison and plan experience. He said the 10‑county average increase of roughly 9.46% contrasts with a historical norm near 3.21% and with national benchmarks nearer 6–7%. Clark and board members discussed market consolidation in Northern California (Kaiser concentration, hospital acquisitions) and how that can drive steeper short‑term increases in some counties.

On plan experience, Clark reported moderation in medical claims relative to a high‑cost 2022, but continued double‑digit pressure on prescription drugs even after rebates. He highlighted increases in preventive screenings and a rise in in‑person mental‑health utilization; the Canopy Care HMO grew materially in enrollment and the non‑Medicare PPO saw a modest per‑employee cost decline overall. For dental, claims ticked up modestly and participation in the SmileWay chronic‑condition program rose about 18% year over year.

After discussion the board moved, seconded and unanimously approved the 10‑county survey results; that survey will be used as context in the rate‑setting process. Staff and Aon said further rate stabilization actions and the detailed rate cards will return to the board in April and May.