San Francisco HSS board approves 4.96% premium increase for Kaiser Permanente plan

The City of San Francisco held a significant meeting on July 4, 2025, focusing on health plan rate increases and utilization trends for the San Francisco Health Service System (SFHSS). The meeting began with discussions surrounding the Kaiser Permanente health plan, specifically addressing the rate increases over the past six years, which have averaged around 5%. Notably, there was one year, 2019, that experienced a slight decrease of 0.3%.

Mike, a representative from Kaiser Permanente, highlighted that the overall average increase for SFHSS has closely mirrored the health plan's average increases. However, he noted that the aging population and the mix of new members with higher health needs have contributed to upward pressure on rates. This demographic shift has raised concerns about future cost implications.

Commissioner Howe expressed concern that this year's rate increase is primarily driven by a decrease in revenue and an increase in expenses for Kaiser Permanente, rather than utilization trends seen in previous years. Kate Ferrante, Vice President of Strategic Accounts for Kaiser Permanente, clarified that while overall expenses have risen, the health plan's utilization had decreased during the pandemic, complicating the financial picture.

The discussion also touched on the impact of telemedicine on revenue. Commissioner Fosmey pointed out that many health plans have started charging co-pays for telemedicine visits, while Kaiser has not, which may have affected their revenue. Ferrante confirmed that there are no co-pays for virtual visits, which has encouraged increased use of telemedicine services during the pandemic.

Following these discussions, the board moved to accept the staff recommendation for a 4.96% premium increase for 2022, along with the corresponding rate cards. The motion was seconded and opened for public comment, although no callers participated in the discussion.

In conclusion, the meeting underscored the complexities of health plan management amid changing demographics and utilization patterns, as well as the financial challenges posed by the pandemic. The board's acceptance of the proposed rate increase reflects ongoing efforts to balance service provision with fiscal responsibility.