San Francisco health board unanimously approves 2023 rate changes for medical, pharmacy and dental plans

The San Francisco Health Service Board voted unanimously May 12 to approve 2023 rate renewals and rate cards for the city’s employee and early‑retiree health and dental plans, following presentations from staff and actuaries.

Board President and executive staff opened the meeting with procedural items before Aon actuary Mike Clark reviewed the recommended rate changes. Clark said the overall environment reflects a blend of plan experience, rate‑stabilization adjustments adopted after pandemic suppression, and a continuing inflationary pressure in specialty drugs. “The rate increase projects about 6% increase for expected claim experience,” Clark said when summarizing underlying national cost trends that inform local recommendations.

Why it matters: the board’s approvals set employer and member contributions for hundreds of thousands of covered lives and lock in plan pricing that will take effect for plan year 2023. Several votes produced notable contrasts in direction: Health Net’s new Canopy Care product showed a projected 10.4% reduction in total cost rates from its first year forecasts, while the Blue Shield PPO Accolade package carried a combined 7.5% aggregate increase (including stabilization adjustments). Delta Dental’s active‑employee PPO recommended a 15.3% rise, largely reflecting last year’s draw‑down of stabilization reserves.

Votes at a glance
• Teleconference resolution (Gov. Code §54953): adopted unanimously (30‑day renewal).
• Blue Shield Access Plus (HMO): recommended +0.5% for 2023 — approved by roll call.
• Blue Shield TRIO (HMO): recommended +5.3% for 2023 — approved by roll call.
• Health Net Canopy Care (HMO): projected −10.4% relative to initial 2022 forecast; carrier committed to limit 2024 increase to no more than 8% over the 2023 projection — approved by roll call.
• Blue Shield PPO Accolade (self‑funded) and Choice‑Not‑Available: combined +7.5% — approved by roll call.
• Kaiser Permanente California (fully insured): +3.88% premium increase — approved by roll call.
• Delta Dental active‑employee PPO (self‑funded): +15.3% total cost rate; recommendation includes a design change to exclude diagnostic and preventive services from the annual maximum to encourage preventive use — approved by roll call.

What staff and carriers said
Mike Clark, Aon (actuary): described the interaction between plan experience and rate‑stabilization adjustments and noted that for some plans (for example, the PPO Accolade) stabilization moves from a buy‑down last year to a modest buy‑up this year, a factor contributing to higher percentage increases for some member tiers. “It is a function of plan experience and the stabilization adjustment,” Clark said.

Health Net (Greg Christiansen, senior director of pricing and underwriting) attributed the 2023 Canopy Care reduction mainly to a lower projected per‑member capitation rate after observing initial enrollment and demographic mix: Health Net modelled some growth (the carrier’s working assumption was about +1,500 members in 2023) and factored in likely demographic shifts as enrollment expands.

Delta Dental (Michelle Bodie): described existing member outreach and preventive‑care marketing (email campaigns, mailings, programs such as SmileAway) and agreed to coordinate with SFHSS communications to increase member reminders.

Board response and next steps
Commissioners asked several carriers for additional context and briefings: they requested a pharmaceutical‑cost briefing later in the year (genomics and high‑cost specialty drugs were cited repeatedly) and data on provider‑network disruption for administrative changes affecting split families. Executive staff said they will return with more detailed provider‑match analysis and a fuller presentation on pharmaceutical strategies and genomics later in 2022.

All actions taken at the meeting were recorded as motions and approved by roll call vote. The board session closed after introductions from contracted plan representatives and brief public comment (no callers for most agenda items).