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Health Service Board approves retiree dental plan redesign, raises PPO coinsurance for major services
Summary
The San Francisco Health Service System Board approved a rate‑neutral redesign of the retiree dental PPO that raises plan coinsurance for certain major procedures from 50% to 60% if obtained from PPO dentists and increases individual non‑preventive deductibles from $50 to $75, a move intended to encourage PPO network use.
The San Francisco Health Service System Board voted to adopt a rate‑neutral redesign of the retiree dental PPO on April 16, 2019, approving a proposal that raises plan coinsurance for specified major services delivered by PPO dentists from 50% to 60% and increases the individual non‑preventive deductible for Premier and out‑of‑network dentists from $50 to $75 annually.
Aon consultant Mike Clark told the board the change is intended to encourage greater use of PPO network dentists for crowns, dentures, bridges and endodontic work while keeping retirees’ monthly premiums unchanged. Clark said the design change would be paid for by modestly increasing the deductible for non‑preventive services and that the proposal is expected to be rate‑neutral for the retiree dental PPO.
Board members and public commenters debated tradeoffs. Several commissioners and retirees said they were concerned that raising the deductible—even by $25 per year—would add cost pressure for retirees on fixed incomes and could be burdensome when members need immediate care and cannot prearrange a dentist switch. Others argued the higher PPO coinsurance for major services would lower out‑of‑pocket costs for retirees who choose PPO dentists and could encourage greater use of preventive care over time.
Pamela Levin, chief financial officer for SFHSS, had earlier presented financials showing broader fund health, while Aon and plan staff provided utilization data: in 2018 retiree dental procedures were performed 41% in PPO, 54% in Premier and 5% out‑of‑network. Aon said about 24% of retirees used at least one of the major services targeted by the change in a given year.
After discussion and public testimony, the board approved the design change. Staff and the actuary emphasized that the action does not change the previously approved 2020 dental rates (those approvals were handled in a separate motion), but will change the plan design that applies to the retiree PPO if enacted.
The board instructed staff to include clear member communications around the change and to work with Delta Dental and SFHSS staff on outreach emphasizing preventive care and how members can find PPO providers. The board also reserved the right to revisit the plan design as utilization and member feedback are collected.
The decision follows a separate vote earlier in the meeting in which the board approved recommendations 1–4 for Delta Dental (administrative fees and insured HMO elements) by voice vote.
The new retiree plan design will apply for the 2020 plan year as described in materials presented to the board; staff will provide enrollment and member‑impact details in follow‑up communications.
