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Kaiser shunned by large California group customers

The bargain is gone, according to customers of Kaiser, one of the nation’s largest group disability insurance providers as well as HMOs. Worse, the company is standing in the way of controlling healthcare costs by not negotiating rates or fully explaining why its premiums keep rising.

Kaiser staves off the criticism by saying it remains a great value for employers and patients, as it offers superior care at rates that are often 10 percent below its rivals, and instead considers the backlash as a direct attack on how it does business.

Frustration has flared up as officials in the city of Los Angeles, San Francisco and at the California Public Employees’ Retirement System, bristle at Kaiser’s rate hikes.

Kaiser premiums have increased 65 percent for CalPERS since 2007. This is in comparison to Blue Shield of California’s HMO rates, which have risen 50 percent, as well as an Anthem Blue Cross preferred-provider plan which has increased 43 percent for the same period.

Kaiser’s cite state Senate legislation, SB 746, that would require the company to disclose more details on how it calculates rates and spends money. Powerful special interest groups such as AARP, big labor unions and the Safeway grocery chain, support the bill.

This comes as health insurers, hospitals and other medical providers nationwide face growing pressure from employers and policymakers to divulge more cost information.

However, while Kaiser states it provides employers detailed data on their medical costs, it cannot be compared with other insurers because it operates so differently, mostly in light of the fact that the HMO also operates hospitals.

Kaiser has received many high marks for its preventive care and overall performance from Medicare, outside experts and patient-safety advocates. Policymakers cite the company as a model for how it coordinates care across its hospitals and physician offices.

The federal Affordable Care Act pushes other insurers and medical providers to collaborate in much the same way in the hope that it will lead to better care at a lower cost.

The proposal, which would require all health insurers to submit more information to the state on rate increases for large employers, has cleared the state Senate and awaits further action in the Assembly next month.

Health care costs are on the rise but causes for dramatic increases are revealed only at the discretion of the provider. If you or your co-workers feel you have been paying unfair premiums for your coverage, be sure to contact the proper legal authority through your employer.

Source: Los Angeles Times, “Kaiser’s rising premiums spark employer backlash” Chad Terhune, Jul. 25, 2013

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