SFHSS approves 2024 rate actions: 10-county survey and stabilization reserve applications

The San Francisco Health Service System board on March 23 voted on several rate‑setting and reserve actions that will affect plan year 2024 premiums and stabilization balances.

Adopt 10‑County Survey: The board adopted staff’s recommendation to accept the 10 largest‑county survey results, which staff calculated as a simple average showing a 3.21% change and translated to an estimated single-coverage amount of about $805.85 monthly. CFO Iftikhar Hussain said the methodology uses a simple average because enrollment by plan is not publicly available; commissioners discussed the limits of comparability and the lack of weighted enrollment data but approved the recommendation unanimously.

Blue Shield stabilization (action): Mike Clark of Aon presented 2022 Blue Shield HMO results showing a sizable increase in large claims in 2022. Clark reported 17 individuals exceeded $1,000,000 in claims in 2022 and 49 exceeded $500,000, producing a calculated stabilization reserve deficit of $10,077,000 as of 12/31/2022. Per board stabilization policy, Aon recommended amortizing the deficit over three years and applying one‑third ($3,359,000) to reduce 2024 rates. After clarifying that the agenda incorrectly labeled the figure as a "surplus," the board approved the one‑third amortization and application to 2024 rates by unanimous roll call.

Health Net stabilization (action): For Health Net Canopy Care HMO, Aon presented an inaugural year (2022) experience that produced a stabilization surplus of $353,000; Aon recommended applying one‑third ($118,000) of that surplus to buy down 2024 rates. The board approved the recommendation unanimously.

Delta Dental stabilization (action): Aon presented favorable 2022 claims for the active‑employee Delta Dental PPO plan and recommended a one‑time suspension of the standard three‑year amortization to apply one‑half of the stabilization surplus to 2024 rates; the presentation showed a recommended buy‑down of $5,557,000 (one half of the cited $11,113,000 stabilization balance). The motion to suspend policy and apply one‑half toward rate buy‑downs passed unanimously. Note: a speaker's spoken motion contained a transcription error listing an implausibly large number; the board used the figures from Aon's presentation.

Closed session votes: The governance committee moved the board into closed session to review the annual employee performance evaluation draft report; after closed session the board voted not to disclose actions taken in closed session and later voted not to disclose any or all discussion held in the closed session under the cited San Francisco administrative code sections.

Votes at a glance:
- Approve February 9, 2023 minutes — unanimous (roll call)
- Adopt 10-county survey results for plan year 2024 — unanimous (roll call)
- Approve use of 1/3 of Blue Shield stabilization deficit ($3,359,000) — unanimous (roll call)
- Approve use of 1/3 of Health Net stabilization surplus ($118,000) — unanimous (roll call)
- Suspend policy and apply 1/2 of Delta Dental active PPO stabilization surplus ($5,557,000) — unanimous (roll call)
- Enter closed session and decline to disclose actions/discussion — unanimous (roll call)

The board's actions will be reflected in the 2024 rating and benefits workstream and staff said more detailed rate recommendations will be reviewed at future meetings.