After holding them up for a week, a Board of Supervisors committee reluctantly agreed Wednesday to send the package of proposed 2014 health care rates to the full board for consideration – including the controversial 5.25 percent increase from Kaiser Permanente.
The decision makes it less likely that the 46,000 public employees and retirees that depend on Kaiser through the city’s Health Service System will see their service disrupted at the end of the year, a risk that officials from the city’s health system had warned against.
But supervisors said the delay was not without merit: After negotiations that continued into Wednesday morning, Kaiser officials pledged at the hearing to take several steps to increase rate transparency in the coming year, as well as invest in a “multiyear wellness plan” that the health care giant will also pay to study.
The budget committee – after pressure from the city’s largest labor union – last week had refused to forward the rate package to the full board, saying Kaiser has not been forthcoming enough about why the increase is needed. On Wednesday, members said they were encouraged by the conversations over the past week and hopeful that negotiations over the 2015 rates would start earlier and allow the city more leverage.
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They agreed with Health Service System officials, who stressed the importance of the city’s six-decade relationship with Kaiser.
“I think we are doing our job as a board by asking questions,” said Supervisor Eric Mar, one of three committee members. He said he hoped to have more answers from the health care provider in writing by the time the full board votes on the rate proposals next week.
About 108,000 current and former city, school district, court and city college public workers are covered by the Health Services System.
Under the rate package sent to the board Wednesday, the city will pay around $560 per month for most single employees covered by Kaiser, a 5.25 percent rate increase. Employees covered under the Blue Shield option will cost about $650 a month; the city’s health plan will run around $1,000 a month per employee. Employees pay only a fraction of those costs – around $4 a month for Kaiser and $60 a month for Blue Shield.
But representatives of Service Employees International Union Local 1021, the city’s largest labor union, argued that every penny the city pays to health care is money that cannot be spent elsewhere. City, health system and union officials have all expressed concern over the past week about Kaiser’s opaque profit margins and are supporting state legislation that would require more transparency in rate setting. The Health Service System estimates that it overpaid the health plan by $87 million from 2010 to 2012.
Still, Gregg Sass, acting chief financial officer for the health system, said that in the context of inflation, next year’s rate increase doesn’t seem exorbitant.
Peter Andrade, senior vice president for California sales and account management for Kaiser, said Wednesday that the health care company is “committed to you as a client and your employees,” and wants to be “good citizens” of San Francisco.
Date: July 17, 2013