Board keeps Kaiser plan design unchanged, adopts higher 2024 premiums amid union oppose and debate

The Health Service System Board spent substantial time on Kaiser Permanente’s fully insured 2024 renewal, weighing two staff options: adopt Kaiser’s status‑quo plan design (no benefit changes, higher premium) or approve design changes to align Kaiser with other HMOs to lower the premium increase.

Aon actuary Mike Clark explained the tradeoffs and presented two modeled outcomes: a status‑quo renewal that would generate roughly a 12.5% premium increase and a design‑change alternative that would reduce the increase to about 10.86%. Clark said about 4 percentage points of Kaiser’s increase reflected plan experience and the remainder was driven by enterprise expense escalation; he described Kaiser’s costs as more 'front‑loaded' compared with network model plans.

Several commissioners urged caution about increasing member cost‑sharing. Commissioner Follinsbee warned that higher copays could deter necessary care for members with chronic conditions and shift costs onto ill members. Commissioner Savansky and others called out large inpatient and outpatient co‑pay increases in the staff‑recommended design and asked whether intermediate options had been explored.

Bianca Polavina, speaking for IFPTE Local 21, urged the board to preserve the status‑quo plan, noting that more than 2,500 Local 21 members are Kaiser enrollees and that the proposed copay increases would impose substantial everyday costs. Frank Bratz of the San Francisco Municipal Attorneys Association expressed a general objection, saying the increases 'have not been justified.'

Commissioner Howe moved to adopt the status‑quo Kaiser plan design (option 3A) with no design changes and the associated premium increase; the motion was seconded and passed by roll call 6–1. President Scott thanked staff for their work and noted staff will continue collaboration with labor and carriers as open enrollment approaches.

The decision means Kaiser members will see higher premium levels for 2024 rather than the alternative approach of increasing copays to blunt premium growth. Staff retained a hold on a possible June 12 meeting pending final Medicare plan reviews and will transmit the approved package to the Board of Supervisors on the calendared timeline.