Board approves retiree health‑plan renewals; UnitedHealthcare MAPD to rise 15%, Kaiser Medicare plans smaller increases

The San Francisco Health Service Board on June X, 2023 approved a set of retiree health‑plan renewals that will raise premiums for some Medicare plans and produce smaller increases for Kaiser plans.

Aon consultant Mike Clark presented the actuarial analysis. He said UnitedHealthcare’s Medicare Advantage prescription drug (MAPD) plan is recommending a 15% insured premium increase for plan year 2024, driven primarily by federal‑level changes to CMS funding methodology and a risk‑adjustment model update tied to ICD‑10 coding. Clark said those CMS funding changes reduce the federal share of plan costs and thereby magnify the portion borne by SFHSS.

For Kaiser, Clark recommended staff acceptance of a 6.19% insured premium increase for the Kaiser Permanente Senior Advantage (California) Medicare plan. He also presented multi‑region Kaiser HMO renewals (Washington, Northwest, Hawaii) and staff recommended approving those rate cards; early‑retiree rates averaged about a 6.3% increase and Medicare retirees averaged roughly 4.5%, noting those plans cover small populations in some regions.

On UnitedHealthcare, staff evaluated a plan‑design option (raising primary‑care and specialty office‑visit copays by $5) that would have lowered the needed rate increase by roughly 0.9 percentage points (about $900,000 annually), but staff recommended against the copay change because it could reduce preventive‑care utilization, which helps capture diagnoses that support CMS risk scores and plan funding. "Increasing the primary care provider copay may reduce utilization," Clark said, noting the projected premium reduction was modest (about $50 per member annually) compared with potential adverse impacts on risk scores.

Retiree advocates and board members urged more outreach and consideration of impacts on early retirees. Fred Sanchez of Protect Our Benefits asked the board to extend outreach and engage affected retirees directly, saying some early retirees are considering dropping coverage because they cannot afford further increases. Commissioner Breslin and others noted member complaints about service access and asked staff for demographic breakdowns by plan and tier; staff said the demographic report and utilization data will be provided and that additional analysis will be scheduled for August.

Roll‑call votes accepted the staff recommendations for the Kaiser multi‑region rate cards, Kaiser CA Senior Advantage rate card (6.19%), and the UnitedHealthcare MAPD status‑quo rate card (15% increase). All motions passed unanimously.

The board directed staff to provide utilization analysis and demographic breakdowns at a future meeting to show how many early retirees are affected and to report back on program utilization for added benefits such as post‑discharge meal delivery and transportation.