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Health Service Board approves 2017 Kaiser Medicare Advantage retiree rates, adds acupuncture and fitness benefits
Summary
The Health Service Board approved Kaiser Permanente’s 2017 Medicare Advantage retiree renewal rates after hearing an actuary explain a $9.76 reconciliation to CMS capitation estimates; the plan will add an acupuncture benefit bundled with chiropractic visits and a Silver&Fit fitness benefit for seniors.
The Health Service Board voted unanimously on May 12 to adopt the actuary’s recommendation for Kaiser Permanente’s 2017 Medicare Advantage retiree renewal rates.
The actuary, Veil Kosher of Aon Hewitt, told the board the billed 2016 base was $331 and that a reconciliation from CMS added $9.76, producing a 2017 billing rate of $340.76. Kosher explained that Medicare Advantage uses an area‑adjusted capitation payment from CMS and that final CMS remittances can require reconciliations that are folded into subsequent years’ rates. "When they get all their remissions in, they figure out what the adjustments to the filed request are," Kosher said, noting CMS has been “ratcheting back money” and that early estimates are later reconciled.
Why it matters: commissioners pressed for clarity about what drives the reconciliation and whether the same early‑estimate practice applies to other carriers. Kosher said CMS calculations are diagnosis‑ and risk‑adjustment driven and can differ across carriers; he added that robust coding and data collection can yield higher CMS payments to a carrier and therefore lower net charges to purchasers.
Board members also received a line‑by‑line explanation of how the plan premium is built. Kosher said the final premium includes vendor premium plus additional components such as VSP vision, a health‑care sustainability factor and the Best Doctors program. He highlighted specific member impacts: the retiree plus‑one category increases by $12.88 and a three‑Medicare‑member household shows an increase of $38.66 after reconciliation.
Public comment and vendor benefits: Claire Zavonski, representing retirees, asked for clearer rate illustrations for households with both Medicare and non‑Medicare dependents; Kosher clarified the packet includes a family column for two non‑Medicare dependents. Cindy Bridal, a Kaiser representative, described two benefit additions accompanying the approved renewal: "We're adding the acupuncture rider to the CHIRO rider" with a $15 co‑pay per visit and up to a combined 30 visits, and the Silver&Fit program that provides gym membership options or a home fitness package for senior advantage members.
Outcome and next steps: The board approved the actuary’s recommendation and adopted the renewal premiums as presented. The board directed staff to include clear rate tables and plan benefit descriptions in materials for retirees and to continue reviewing alternatives—particularly for non‑Kaiser carriers—at the June 21 Rates and Benefits meeting.
Provenance: The discussion and motion to approve began with the actuary’s presentation (Item 3) and concluded with the board vote in favor of the motion.
