Board approves $6.59M and $5.31M uses of stabilization reserves to buy down 2023 rates
March 10, 2022 | San Francisco City, San Francisco County, California
This article was created by AI summarizing key points discussed. AI makes mistakes, so for full details and context, please refer to the video of the full meeting. Please report any errors so we can fix them. Report an error »
The San Francisco Health Service System Board on March 10 approved consultant recommendations to apply portions of plan stabilization reserves to reduce projected 2023 premiums for several employer‑sponsored plans.
Mike Clark of Aon presented plan‑level experience for 2021 and the stabilization‑reserve recommendations. For the Blue Shield HMO plans (Access Plus and Trio), Clark recommended applying one‑third of the 12/31/2021 stabilization reserve surplus — $6,592,000 (one‑third of $19,775,000) — to buy down 2023 rates across rating tiers, splitting benefits proportionally between active employees and early retirees. Clark said total incurred plan expense rose about 9% PEP M versus 2020 and that the 2021 loss ratio was 98.3%.
On Delta Dental’s active employee PPO plan, Clark reported that 2021 experience returned to near‑typical levels after 2020 pandemic suppression and recommended a one‑time suspension of the stabilization policy to apply one‑half of the 12/31/2021 surplus — $5,309,000 (one‑half of $10,618,000) — to buy down 2023 rates, leaving an estimated carryforward balance of approximately $5,308,000 for 2024. Clark noted preventive dental utilization improved in 2021 but remained below 2019 levels.
Commissioners discussed trends as services returned after pandemic suppression and asked staff to monitor utilization and large‑claim trends; no public callers entered the queue. Motions to adopt staff recommendations for both plans were moved and seconded and passed unanimously. President Follinsbee, Commissioner Breslin, Supervisor Chan, Commissioner Howe, Commissioner Scott and Commissioner Zavansky voted aye.
Why it matters: The board’s decisions lower near‑term premiums by drawing on accumulated stabilization surpluses rather than increasing immediate revenue or premiums. The actions change the amount of reserve carried forward into 2024 and will be reflected in the formal rate calculations presented at the May meeting.
Next steps: Staff and Aon will finalize rate calculations and present final rates during the May 12, 2022 meeting; staff also committed to include retirement dental questions and member‑service concerns raised by commissioners in forthcoming retiree dental rate presentations.
Mike Clark of Aon presented plan‑level experience for 2021 and the stabilization‑reserve recommendations. For the Blue Shield HMO plans (Access Plus and Trio), Clark recommended applying one‑third of the 12/31/2021 stabilization reserve surplus — $6,592,000 (one‑third of $19,775,000) — to buy down 2023 rates across rating tiers, splitting benefits proportionally between active employees and early retirees. Clark said total incurred plan expense rose about 9% PEP M versus 2020 and that the 2021 loss ratio was 98.3%.
On Delta Dental’s active employee PPO plan, Clark reported that 2021 experience returned to near‑typical levels after 2020 pandemic suppression and recommended a one‑time suspension of the stabilization policy to apply one‑half of the 12/31/2021 surplus — $5,309,000 (one‑half of $10,618,000) — to buy down 2023 rates, leaving an estimated carryforward balance of approximately $5,308,000 for 2024. Clark noted preventive dental utilization improved in 2021 but remained below 2019 levels.
Commissioners discussed trends as services returned after pandemic suppression and asked staff to monitor utilization and large‑claim trends; no public callers entered the queue. Motions to adopt staff recommendations for both plans were moved and seconded and passed unanimously. President Follinsbee, Commissioner Breslin, Supervisor Chan, Commissioner Howe, Commissioner Scott and Commissioner Zavansky voted aye.
Why it matters: The board’s decisions lower near‑term premiums by drawing on accumulated stabilization surpluses rather than increasing immediate revenue or premiums. The actions change the amount of reserve carried forward into 2024 and will be reflected in the formal rate calculations presented at the May meeting.
Next steps: Staff and Aon will finalize rate calculations and present final rates during the May 12, 2022 meeting; staff also committed to include retirement dental questions and member‑service concerns raised by commissioners in forthcoming retiree dental rate presentations.
Don't Miss a Word: See the Full Meeting!
Go beyond summaries. Unlock every video, transcript, and key insight with a Founder Membership.
✓
Get instant access to full meeting videos
✓
Search and clip any phrase from complete transcripts
✓
Receive AI-powered summaries & custom alerts
✓
Enjoy lifetime, unrestricted access to government data
30-day money-back guarantee
