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Budget committee reviews health benefit rate increases and ACA‑driven plan changes
Summary
Health Service System staff and actuarial consultants told the committee the 10‑county average employer contribution rose to $503.94 a month, triggering the charter‑mandated minimum and prompting plan design changes to comply with federal health reform. The committee forwarded related ordinances and resolutions to the Board.
SAN FRANCISCO — The Budget and Finance Committee reviewed proposed health service system rates and plan changes required by federal health reform and the city charter’s 10‑county survey rule.
Catherine Dodd of the Health Service System presented the annual calculation that under the charter sets a minimum city employer contribution. The 10‑county average increased from $472.85 last year to $503.94, a jump the presenters reported as roughly 6.6 percent. Dodd outlined benefit‑design changes necessitated by the Patient Protection and Affordable Care Act, including expanding dependent coverage to age 26, removing lifetime benefit limits for essential benefits and requiring coverage of certain preventive services without copays.
Mercer actuary Reese Evans (presented by the Health Service System staff) explained how plan experience and vendor proposals affected premium projections. The staff described plan design modifications intended to control costs, such as raising the hospital admission copayment and increasing non‑formulary drug cost sharing, while adding parity for substance‑abuse residential treatment and expanded dental benefits. The Department’s packet shows aggregate city plan costs rose but overall plan year cost increase measured about 3.1 percent when averaged across all plans — below the regional average, staff said.
The budget analyst summarized fiscal impacts: based on FY2010–11 premia the total cost for health and dental contributions was a little over $323 million, including ~$185.2 million of general fund support. The analyst recommended approval of the ordinance and resolution as presented; the committee accepted the staff amendment for the vision buy‑up plan to make implementation subject to the Controller’s administrative determination and forwarded both items to the full Board (items 6 and 7 on the agenda).
Provenance: presentation and Q&A, SEG 036–SEG 249; budget analyst summary and recommendations, SEG 251–SEG 299; amendment and committee motion, SEG 452–SEG 476.
