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SFHSS board approves 2021 budgets, applies $744,000 of UHC PPO deficit to 2021 rates
Summary
The San Francisco Health Service System Board unanimously approved the FY2021 general fund and sustainability fund budgets and accepted an actuary recommendation to amortize $744,000 of a $2.233 million UnitedHealthcare PPO rate stabilization deficit into 2021 rates, with the remainder carried forward.
The San Francisco Health Service System Board unanimously approved two budget packages and a recommended actuarial adjustment on Wednesday.
The board voted to adopt the proposed FY2021 general fund budget and the Health Care Sustainability Fund budget, which together outline annual and one‑time expenditures for operations, open enrollment and well‑being initiatives. Commissioner Wilfredo Lim told the board the mayor’s office instructed a 3.5% reduction target for department budgets, which the HSS projected would reduce well‑being grants and on‑site activities by roughly $126,227 for 2021 and $252,455 for 2022. Pamela Levin, chief financial officer, said the system’s operating budget remains ‘‘minuscule’’ compared with the benefits it administers and noted the agency will ask the Mayor’s Office to restore funding for certain well‑being items after the base budget is submitted.
The board also considered a recommendation from Aon actuary Mike Clark on the UnitedHealthcare (UHC) PPO City Plan rate stabilization reserve. Clark presented a calculated stabilization deficit of $2,233,000 as of Dec. 31, 2019 and recommended applying one‑third of that deficit—$744,000—as a rating buy‑up amortized across rating tiers for the 2021 plan year, with the remaining $1,489,000 carried forward. Clark told commissioners the $744,000 would represent roughly a 2% rate impact beyond trend in early estimates for 2021. The board voted to accept the actuary’s recommendation.
Board members debated the implications of ongoing deficits for the UHC plan; one commissioner observed that with enrollment and risk profile stable, deficit carryforward remains likely and urged staff to pursue ideas to lower projected costs when negotiating with UnitedHealthcare.
All budget and reserve votes were recorded as carried unanimously. The board’s action directs staff to finalize the rate recommendations for presentation in May and to continue pursuing operational and contracting steps intended to restrain future deficits.
