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Board approves 5.8% Kaiser Permanente premium increase for 2021 after questioning on utilization and PPE
Summary
Following a presentation by Aon actuary Mike Clark and statements from Kaiser representatives, the board unanimously approved a 5.8% increase to Kaiser plan premiums for active employees and early retirees for 2021; commissioners pressed carriers about 2019 utilization drivers, pandemic-era trends, PPE reuse, and a union side‑letter issue.
Aon actuary Mike Clark presented a recommended 5.8% increase to the Kaiser Permanente fully insured premium for the 2021 plan year for active employees and early retirees. Clark said the recommendation is based on SFHSS members’ 2019 claims experience trended to 2021 and that inclusion of unchanged vision premiums and the $3 SFHSS sustainability fee results in a roughly 5.7% increase on the rate cards.
A Kaiser representative described Kaiser as an integrated delivery system that is ‘‘fully activated’’ for the pandemic response and emphasized telehealth expansion and other operational changes. Kaiser underwriters said 2019 SFHSS utilization increased in inpatient surgery and inpatient mental‑health categories and that several very large inpatient claims (including transplants and multi‑million‑dollar cases) materially pushed up pooling and per‑member costs.
Supervisor Dean Preston and other commissioners pressed Kaiser and Aon on whether pandemic‑era lower utilization in 2020 would reduce future rates; Kaiser replied that utilization trends will be monitored and that any changes would be reflected in future rate cycles but cautioned that pent‑up demand and pandemic preparedness costs complicate short‑term forecasting. On specific concerns, Kaiser representatives said they are following CDC and FDA guidance on PPE reuse and that they have channels for employees and unions to raise PPE concerns; they also confirmed that a staff member who tests positive is placed on paid furlough until they test negative.
Preston also raised questions about Kaiser’s recent financial results, executive compensation and advertising expenditures and asked whether Kaiser had proposed a side letter that could limit union speech; Kaiser said the proposed letter was meant to prevent organizational‑level disparagement between parties and was not intended to restrain individual employees’ speech.
After public callers urged the board to reject rate increases and raised concerns about PPE and gag‑order language, Commissioner Randy Scott moved to accept the staff recommendation; Commissioner Mary Howe seconded. The board approved Kaiser’s renewal unanimously.
Next procedural step: staff will transmit the approved rates and rate cards to the Board of Supervisors for their review and approval as required by charter process.
