Other Health Coverage thats not sponsored by one of our employers. Number two here, this is 2 and 3 is in respect to our s. F. A. S with health care s. F. A. S, they can decide to cancel Going Forward for the rest of the plan year, cancel their election. They can make a new election if they had not enrolled in a flexible spending account before. Or they can increase or decrease their election. And this is Going Forward. And number three, applies to our dependent care flexible spending accounts. Again, they can cancel Going Forward in the plan year of their election and make a new election or increase or decrease the election they have made for the plan year 2020. Next slide. So the next one, which is based on i. R. S. Notice 2033, is specific to Health Care Flexible Spending accounts and this is our carryover provision that we currently have in our Health Care Flexible Spending accounts. Typically i would ask you to approve this, again, this september for the following 20202021 plan year but i wanted to include it in the addendum now so that members get notice that this is changing so they can better financially plan what theyre going to do with their Health Care Flexible Spending accounts. What this notice from the i. R. S. Does is increase the carryover limit from 500, for 2020, to 550. And to make sure that you all know that the carryover is the money that you have left over that you dont spend in one plan year. You can carry it over to the next year, up to 550 for 20202021. Just as a note here, the i. R. S. Is not requiring employer groups or those leading the group to make those changes. Its completely up to the employer and its on a go forward basis. And it does have to if you decide to do these you have to make sure to follow the nondiscrimination rules. That means that you cant just give it to one group to be eligible and not others. Next slide, please. We will be implementing this with a communication plan, mostly webbased meeting with the department, personnel officers within the city, emails and well be working with our other employer groups and the superior court so they can apply and send these notices out or a notice about this addendum through their communication channels. So basically h. S. S. s recommendation to the board is that you approve this event and that modifies the two plan documents, our section 125 cafeteria plan and the sfhss rules to make them consistent with the notices from the i. R. S. And those allow employees and retires who are eligible for benefits to make midyear election in the calendar year without a qualifying event. Any questions from the board . Vicepresident follansbee, m. D. this is commissioner follansbee. If this is approved today this is up for reapproval in september when we normally would approve the recommendations for the following 2021 years . So the guidance from the i. R. S. Is that this only applies for 2020. The only piece of this is the notice 202033, which raises the carryover from 500 to 550 for sfhss h. S. A. But the other 2029 is the medical plans and the vision and the Health Care Flexible Spending account elections only applies for 2020, and this would be amending the current documents that we had out there that you approved back in september. Commissioner scott this is commissioner scott and i move that we accept the staff recommendation. President breslin is there a second . Commissioner canning i second. President breslin okay. Is there any Public Comment on this item . Clerk at this time were going to go into the Public Comment section for this item. Were going to give the numbers at home a few minutes as there is quite a delay between this live event and the feed that is being given to members through sfgovtv. So ill pause for about 30 seconds to allow for people at home to catch up to the questions that were asked and for them to join the phone line at this time. Clerk moderator, can you please up the phone line for our first caller. You have two questions remaining. Hi, just want you to know this is commissioner zvanski and im only through Public Comment, i somehow cant connect through the computer. So i apologize. I have no questions and i support thests, so please record my vote as being supported and on the board. And i apologize again. I am reaching sfgov remotely and its the only time that i attend the Board Meeting at this time. Thank you. Clerk thank you. Moderator, can you please up the call line for the next caller . You have one question remaining. Good morning, commissioners. Thank you for everyones work to provide flexibility to all City Employees through this agenda item. My comment is related to addendum item 2 about the changes. As described on page 2 and page 5 of the attached notice 202029, the i. R. S. Now submits the cafeteria plans such as ours to apply unused balances to pay for or reimburse medical expenses near the end of the year, december 31, 2020. And how this would apply to the city is that the grace period for unused balances had already ended back in march. And i wanted this to ask to extend the grace period through the end of the 2020 calendar year because the grace period, again, had ended in march to provide additional to all employees and if theres future addendums to any future addendums planned for rollovers and balances of this calendar year 2020 as allowed by notice 202029. Thank you for your time, commissioners. Clerk thank you, sir. Moderator, are there any callers left in the queue . You have zero questions remaining. Clerk thank you. President breslin, this concludes Public Comment. President breslin okay, we have a motion on the table to approve addendum to section 125 cafeteria plan and sfhss membership rules. All those in favor signify by saying aye. Aye. President breslin any opposed . Its unanimous. All right. And now well go into our raise and benefit section and i remind everybody that this is a continuation of our may 14th meeting and there were many Public Comments at that meeting. And the recommendations, the staff recommendations remain the same as that meeting. But i will limit the Public Comment time to one minute. And i appreciate any of those who had comments at the other meeting, if they may consider not recommenting if there is nothing changed, but that would be up to you. So id like to have director to maybe explain how the rates and benefits works. Thank you, commissioner breslin. This is the executive director of Health Service system. Thank you to the board for adjusting your schedules to attend this special meeting today. As we know, setting rates and benefits on an annual basis is a very rigorous process. It is not easy to do. And indeed sfhss was created to have this primary role of working with Actuary Services to determine the best rates on behalf of our members in San Francisco. Our actactuary well hear from shortly to determine what the rates are for the coming year so those negotiations that occur take all of that very sophisticated mathematical analysis into consideration and is a process that is standard in the industry. And it can be difficult to understand. Certainly, weve all done a lot of study. Theres educational videos on our website that explain how rates are set. Because we do we do realize that it is a difficult science for people to understand and so we do our best to make sure that the public understands and that our members understand how we do this. We do stand by the recommended rates that were submitted to the board last week, or two weeks ago, and that enables us to ensure the same level of coverage that our members have come to expect. So its important that we recognize that theres no changes in the coverage of the benefits that our members enjoy. A very rich Health Benefit in San Francisco that is guaranteed to our members through the charter and health ordinance. So its our job as the Health Service system to administer these benefits and i think that most people recognize that were on a very, very tight timeline every year to get these rates approved by the Health Service board, approved by the board of supervisors, so that i. T. Systems can load in all of the data, the Communications Team can prepare the outreach material, and that can all drop and be ready by october 1st for our members to enroll or reenroll in their health plan. That allows us then to crunch the numbers, get all of those new information over to the health plan so that each of us have a valid, effective Insurance Plan in place on january 1st. So its a very heavy lift every year and the timeline is extremely sensitive. So we appreciate having the special meeting to continue this process. I also just want to note that Health Care Costs are increasing and, again, thats a complex discussion that we can, again, have at another time. But we do take into account the increase in utilization of these benefits that our members have been doing, which is good that we are enjoying the benefits. And that the cost of the health care really has to do with the infrastructure of the system, the expense of the workforce itself, and the pharmaceuticals and the technology that are also prevalent in our Health System today. So with that im going to turn the microphone over to our actuary, mike clarke, who will present the kaiser plan first and then proceed with the blue shield plan and the United Healthcare plan. So, mike, its your turn. President breslin madam secretary, you didnt read the item yet though. Clerk yes, ill wait for our producer to move over to the slide and then ill call the item. Llt r all right, item 4 is review and approve updated of the Kaiser Permanente nonmedicare rates and premium contributions for active and early retiree members, plan year 2021. This presentation is from mike clarke for aon. Mike clarke for aon. Next slide. Ill present the Kaiser Permanente 20202022021 nonmedicare rates and premium contributions for active and early retiree members. This starts with a ratesetting premise that we included for todays discussions on the three plans. Just to help to bring more visibility to our ratesetting process and then how total cost rates allocate to members and employers. Then we will dive into the 2021 plan rating for the Kaiser Permanente or kaiser plan and present the 2021 rate cards for early retirees and finish with our recommendation and then ask for a statement from a kaiser representative. You cannee appendix items in this presentation. I do not plan to cover them in this particular discussion today but the appendix slides are also available for reference. Next slide. So as we start the ratesetting methodology process on the next slide, we thought that it would be helpful to talk through a couple of different concepts. So if you could forward to the next slide, please. Starting with health plan funding. And each of the San Francisco Health Services plans utilize a particular funding method based on how that particular plan is established. And they can be summarized in three different categories which represent the column headings to this slide. Selffunded plans are where the claim dollars are based on services delivered to members or paid by the trust, along with planned Administration Fees to manage the plan. And you can see in the second row the aon actuary uses fees for selffunded plans. And a particular example that ill talk through later today is the u. H. C. City plan. And the second is for the two blue shield plans and, again, ill review those in more detail later today. But for high level summary, flex funding is an insurance approach where most claim dollars based on services delivered to members are paid by the trust, with six costs for Certain Health Care Services called capitation as well as planned Administration Fees and large claim reinsurance, that pooling mechanism that occurs at 1 million per participant annually. And here the aon actuary, myself, is doing those with cost assumptions that i validated as the ac actuary and the large clm pooling fees. So in this particular presentation well focus on fully insured. As you can see towards the bottom of the third column here all kaiser plans to sfhss members are fully insured. The funding method of fully insured is that the Health Planet sets fixed dollar premiums to cover expected claim costs for Health Care Services by members as well as the administrative fee costs incurred by the plan. And a very important distinction is that second row in the last column here, who sets the recommended sfhss plan rates for fully insured plans. For these fully insured plans its the plans actuary, using planned cost assumptions, but assumptions that i carefully scrutinize as the aon actuary and along that the administrative fees and any large claim fooling adjustments and required legislative fees. And theres a large claim pooling neck nymph in the kaiser plan very similar to what is described on this page for the blue shield plans. So we just wanted to start with the perspective distinction of the funding methodologies as well as my involvement as the aon actuary on behalf of the Health Service board in setting rates for each of these programs and in particular on the fully insured plans, its the planned setting the rates but with careful scrutiny by myself and certainly working in conjunction with abbey and her team at the sfhss staff. Next slide, please. So this process is what we use as actuaries to develop the plan rates that youll see today. Both for the kaiser plan in this presentation as well as the blue shield and the United Health care rates that well see in later presentations. We start with the prior period claims, a base of experience thats used to then to project forward, applying Health Care Trend inflation factors, so that executive director referred to civil of these factors that drive ever increasing health care prices, including the price of services escalating. So how the physicians and the laboratories and the Health Systems and the hospitals are reimbursed for care. Planned utilization. So as we grow older, it tends to lead to greater use of health care. And so any changes in plan utilization also factor into the Health Care Inflation factor. And then new technology. There are always new technologies supporting patients with medical care. New prescription drugs. Many of these are commented upon in the media at times, which are phenomenal new technologies that do help promote better health, Better Outcomes for patients. But, certainly, as these new technologies are developed they typically come at higher price tags than predecessor technologies. So after we apply the Health Care Trend inflation factors, then we account for any plan design or head count changes and for sfhss, the there are no plan design changes proposed for this cycle. And the enrollments by plan tend to remain relatively consistent from one year to the next. So for sfhss, this is a very minor element of the process, but a part of the process, nonetheless. We add administrative and other fees that ive talked about earlier slide from the health plans. And then also sfhss specific cost elements such as any adjustments to the Rate Stabilization reserve application and rates, or the 3 sfhss Health Care Sustainability fee. So those are the final component added into the determination of rates. And then the next step is that the aon and plan actuaries compare the next year cost projections to the total current year dollars when we multiply the existing rates. So, for instance, right now for 2020 rates, times current enrollment in 2020. So that leads to the needed percentage change in rates from this year to next year. And the bottom of this slide illustrates the calculation thats done, bottom line, youre taking the 2021 projected plan cost, divided by the 2020 rates times enrollment, to determine what that needed rate change factor is going into the 2021 plan year. Next slide. So revisiting the slide that we presented two weeks ago, this cycle renewal efforts for each of the plans is focused on understanding how plan costs in 2019 so that is the foundation of costs used in these projections, the first element of the five steps that i talked about on a prior slide and how those plan costs are impacting the 2021 rate actions as well as seeking opportunities to enhance Member Support from the health plans that youll hear from today. So this is the summary of rate actions and for the blue shield plans, the u. H. C. Plan its the afterRate Stabilization Rate Adjustment because that does apply as we looked at two slides ago. For the kaiser plan for this specific presentation its a fully insured plan. So there is no Rate Stabilization applied to the kaiser program. So ultimately this presentation will recommend a 5. 8 rate increase for the kaiser plan for active employees and early retirees. Next slide. This slide captures the total proposed cost rates for 2021 for each of the plan plans that wel present today. You can see kaiser at the top of the page with the red oval, given this specific presentation, but you can see the comparison and the total rates which include not only the base premium rates from each the plans but then also the core vision costs that we add to the rate cards as well as the 3 sfhss sustainability fee. And you can see how these total costs on a monthly basis compare from 2020 to 2021, as well as the dollar difference and the percentage difference for each plan, for each major population grouping, the active employees and the early retirees. And within those groupings, each of the three dependent coverage tiers, and the single tier and the twoparty tier and the full family or the member plus two or more dependents tier. Next slide. And then well close our prelude by examining the how rates are distributed once total cost rates are calculated into employer and member contributions. This particular example captures the city and county of San Francisco employees and the two primary contributionsharing approaches that we present in rate cards in this material. So one set of employees is a 93, 9383, which means as you can see on this chart for the employee only tier, the employer is paying generally 93 of the total rate. And the employee is paying 7 . And for the employee plus one tier, the same 93 employer and 7 employee sharing distribution. And for the employee plus two or more tier, 83 paid by the employer and 17 by the employee. On the bottom of this page you can see the 100 96 83 approach. Where the total rate is fully paid by the employer. So no employee contribution for the employee only tier. And 96 and 4 distribution, the 4 is a little cut off in this exhibit, but its 96 paid by the employer and 4 by the employee. And then for the employee plus two or more tier, the same 83 , and 17 distribution is shown above. I do point to the footnotes here because theres two very important footnotes just to examine. So, first, the footnote number one is th the contribution apprh as shown above, but the other employers and sfhss plans, the San Francisco unified school district, the city colleges of San Francisco, and the superior court, and the m. E. A. Employees all have their employer specific contributionsharing methodologies for active employees. And so total cost rates for these other employers are also segmented by distribution formulas into an employer and member contributions based on those particular employee agreements. And then the second and well focus on this when we present the United Health care rates later today, for the highest cost plan for city, county of San Francisco employees based on m. O. U. , the employer contribution dollar amount or set for the highest cost plan to equal the employer contribution dollar amounts for the second highest cost plan which happens to be the blue shield access plus h. M. O. Except for the employee only in the 100 swlsh 96 83 approach where the member pays no contribution for any plan. Next slide. For retirees and specifically early retirees in this chart, the city charter provides the formula for how contributions are set for employers and members, how those total cost rates distribute into employer and member contributions. This chart illustrates the three elements of the city charter employer contribution formula. We start with the light blue, so the lowest part of these three color bars. The light blue is the same amount for all plans, a monthly dollar figure that is calculated each year and presented and approved by the Health Service board in march to represent the average contribution being made across the 10 most populous counties in california, other than city county of San Francisco. So this is the first basis of the build of the employer contributions for early retirees. The second is whats called the actuarial difference. Its a planspecific amount that is the same for all tiers within a plan and this is the difference between the retireeonly total cost rate for a plan, and the employeeonly total cost rate for a plan. So, again, thats a planspecific calculation. And then the third element, the gold bar, is the retiree prop e. Contribution, which, like the actuarial plan specific, but it does vary in amount between the single tier and the two family tiers. And this is essentially 50 of the amount that is left after the difference are subtracted from the total cost rates. So you can see in this chart each of the four major plans that are offered by sfhss to early retirees, the blue access shield plus in the upper left and the whether you shield trio in the upper right, and the city plan in the lower left and then this particular discussions focus, the kaiser h. M. O. Contribution in the lower right. These are actual 2020 amounts, again, the rate cards that well present today will have the recommended 2021 amounts for each of these segments of the employer contribution for early retirees. Next slide. So with that prelude, lets transition to the discussion on the kaiser recommendation. Next slide. So to summarize before i present the rationale for this recommendation, i just want to summarize that staff recommends that the Health Service board approve today a 5. 8 planned increase from 2020 to 2021 for the active employees and early retirees enrolled in kaiser on the plan rates proposed by kaiser for the 2021 plan year and that the resulting 2021 plan rate year cards for the kaiser h. M. O. For active employees and early retirees are contained in this presentation that well review shortly. Next slide. The kaiser rates and premium contributions for the active and early retirees include the exhibits and, again, i referred earlier to the appendix which shows the underwriting buildup. And the rate cards presented as we reviewed earlier will be for the city, county of San Francisco employees and the 93 93, 83 and the 100 93, 83 strategies recognizing different strategies across the spectrum of sfhss employers. And the early rate card shown in this presentation are for early retirees in the full city contribution levels based on dates of service, dates of hire, length of service, with the employer contributions determined based on the formulas i discussed earlier in our outline to the city charter. Next slide. The 2021kaiser premiums on a status quo design basis are increasing by 5. 8 for medical and pharmacy. Theres no planned changes being considered and this follows the 5. 9 rate increase from last year. The primary driver of this higher increase is impact of utilization that occurred in 2019 relative to 2018, at a higher level that has been seen historically in kaisers data for sfhss. So that overall the increase in kaisers claim forecast from the 2020 plan year to the 2021 plan year is being influenced by what was observed in actual kaiser experience for sfhss plan members as the plan is rated exclusively on a basis of experience of sfhss members and a collective fashion and an aggregated fashion from 2018 to 2019. There is a benefit in the rating because of the permanent elimination of the Affordable Care act tax called the Health Insurance tax. Its permanently eliminated after 2020, so it applies in the 2020 rates, but will not be present in 2021 or any future rates as a result of this tax being repealed by the secure act in december 2019. So this does create a rate offset that leads to the final 5. 8 rate increase recommendation. Next slide. Just a reminder that when we set the total rate cards we also include not only the kaiser fully insured premiums but also the v. S. P. Vision basic plan premiums which are unchanged from 2020. And the 3 Health Care Sustainability fund which i have mentioned earlier today. And, again, we have mentioned the three components of the employer contribution based on city charter provisions for early retirees. Next slide. So the rate cards include these population segments which we have discussed earlier. Next slide, please. So now well talk about the rate cards, starting with next slide the changes in contributions for the early retirees and the 93 93 83 contribution strategy for active employees. This table is a way to show the member contributions on a monthly basis. The employee and the retiree contributions. And th thats in the top set of rows. And the monthly employee contributions in the middle rows and finally the monthly total cost rate at the bottom of the page. And you can see that in all cases that theres a 5. 7 increase. Now the kaiser insured premiums are increasing by 5. 8 , but because the sfhss 3 fee and the vision premiums are remaining the same for 2020 to 2021, when we include those in the rate cards, thats what produces a 5. 7 on this page, slightly, slightly lower than the 5. 8 for the base kaiser premium. Next slide. So this shows a similar view to the prior slide for the figures for early retirees but the 100 100 93 Salt Lake City 83 strategy for active employees. So you can see the 2020 contributions and 2021 contributions of the total rates at the bottom of the slide as well as the dollar and percentage difference between 2020 and 2021. Next slide. This is the rate card itself for the early retirees in the 93 93 83 contribution strategy. So you can see how the premiums compromise of the kaiser insured premium at the very top line. That says premium. Vision is that core vision benefit. And expense is the 3 sfhss Health Care Sustainability fee. On the right side of the page you see how the elements of the city charter contribution formulas plays into this determination of the subtotal of the city contributions and in particular for the single cost tier, the retireeonly tier, the fact that the the city contribution will cover the full rate for the retiree leaving no contribution for the retiree only for 2021, as has happened in past years. And then you can see the comparisons to 2020. Next slide. And then this is the rate card for the 100 96 83 for employees. You can go forward two slides. Again, staff recommends that the Health Service board approve a 5. 8 uninsured plan increase from 2020 to 2021 for active employees and early retirees in california enrolled in Kaiser Permanente on the rates from kaiser for the 2021 plan year and the resulting 2021 rate cards for h. M. O. For active employers and active retirees that we have had in this presentation. Id like to go to the next slide and ask for a statement from a kaiser representative. Good afternoon, commissioners. Im kate tesler with Kaiser Permanente. I, along with my colleagues, appreciate the opportunity to come before the board to engage on the renewal and address any questions that you may have. We have heard the concerns raised at the last Board Meeting. We take these concerns seriously and we want to reaffirm Kaiser Permanentes commitment to working with the sfhss staff and the board, especially during these times of uncertainty. Kaiser permanente was well positioned to address this Public Health crisis long before it appears. Thats because of the provider Care Coverage and our doctors, hospitals, and health plan are all connected, giving us the agility to really act quickly. We dont have shareholders and our earnings go back into serving our members and reinvesting in the quality of care thats always investing in the health of our members and our employer see healthy returns to us. This has not changed in our mission, whether its providing the unique and the challenging opportunity to test our system and toy are veal the true value of our Health Care Delivery system. Kaiser permanente remains fully activated. Were acting swiftly to provide highquality care and support in the safest ways for both our members and our front line staff. For example, within days we moved to we moved over 80 of our member to virtual settings to continue to get the care they needed in a safer way. No matter how long this pandemic lasts, were prepared. So to talk specifically about the renewal that mike just presented today, we have looked at most Health Care Providers such as hospitals and clinics and are looking ahead to our expected costs in 2021. Our approach to developing nextyear rates is designed to allocate our costs in a way that works like each groups consumption of our health care. Thats why that risk profile and utilization information is so important to this discussion. In addition, as mike shared, were offereda as a fully insured health plan, meaning that we take 100 of the risk. Its utilization is higher than forecast, sfhss does not owe Kaiser Permanente additional premiums. As we look at your specific membership, the risk profile is increasing. The claims are higher than the current numbers during the last two years, and overall claims have increased by 8 , when compared to the will previous renewal experience. And in general your membership has used more services when we compare to our overall look at business. And we will continue to work closely with your actuary and your executive director to monitor these and to jointly identify the initiatives and improving risk and the Overall Health of your population. We must do our part as well. So while Kaiser Permanente does provide savings to the city and county of San Francisco, with rates 15 to 27 lower for active members and their families, we know that any increase is challenging. Especially in this current environment. And we remain committed to affordability in health care. And an important piece of this commitment is through our trends and its important to understand that in 2021, the medical trend is 2. 6 and indiscernible are below the average. 2021 is the sixth Consecutive Year where our average increase for our health plan are at or below 5 and your average increase for sfhss over the same period has been 3. 6 . We appreciate the partnership with executive director and the board on the many initiatives that shes led that benefit the health and wellbeing of the city of San Francisco employees. We have had wellness programs, pilot programs such as the recently published Diabetes Prevention program, and quickly implement covid19 testing in partnership with city test s. F. Theres many more initiatives that we have delivered on during this pandemic and some examples are redeploying staff and making sure that equipment, supplies and Staff Members are where they are needed most. And building on our existing telehealth infrastructure to have zoom appointments so members can get care from the comfort of their home. And expanding access to prescriptions and increasing mailorder capacity and curbside pickup. We have also adapted and innovated to improve on how we connect to members and customers including weekly emails with uptodate information about care, resource and support. We dont know what the rest of this year and 2021 will bring with respect to covid19. But we do know that were continue that we are prepared to continue to provide the highest quality of care for the city and county of San Francisco employees and their families. We value the partnership with sfhss and the longterm relationship that spans many decades. Again, we appreciate this partnership and the time to address the board today. Thank you very much. Thank you very much. Lets go to the next slide and president breslin, ill turn it over to you for commissioner discussion. President breslin yes, i wanted to know if there are questions from the commissione commissioners. Commissioner canning this is commissioner canning. Two questions related. The first, mr. Clarke, or madam kessler for kaiser, has the methodology for classifying out layization by our members, has it changed since the same process last year . Yeah, id like to defer to kate to talk through that process. Yeah, absolutely. And id like my colleague lorrainea who is our Vice President of underwriting to address the board on this topic. Thank you, kate and mike. Thank you, commissioners. And president breslin. So to answer the question, we continue to use the same rating methodology yearoveryear as it applies to our customers. As mike discussed in the presentation, we use the utilization and experience from the most recent period which is 2019 calendar year experience, to determine and to project forward the projected utilization and the cost prospective in the coming year for 2021. And we use this methodology consistently for all of the groups that have 1,000 or more average members and so its applied uniformly and across the board. Does that answer your question . Commissioner canning thank you, i believe that it does. And the followup question to that, likely to be directed to you mr. Clarke with regards to aons procedure for corroborating on kaisers methodology. Is aons methodology consistent . I just want to make sure is it identical to their process or is there an Industry Standard that is followed for those results . Sure, no, the underwriting process is very, very similar. I would say that kaiser is very prescriptive with things like demographic adjustments from one year to the next. And they may apply certain formulas and certain factors, for instance, in their underwriting to produce any sort of demographic adjustments or perhaps any minor design changes that may be required by state law, state regulators as an example with kadiser as the underwriting plan. As the aon actuary on the selffunded plan have a different fund rate on our National Forecast that were gathering as well as the bay area forecast versus kaiser determining their projected trend rates and their underwriting. So, for instance, that is a difference and rate forecasting is using a specific trend that they develop, but, certainly, with my scrutiny as the actuary on that particular assumption, it just so happens that this cycle that the forecast kaiser trend in their environment is a lower figure, its a lower perseasopercentage that apply ir underwriting than, say, i would use in the selffunded or flex funded rate productions. Does that help . Thank you, thank you both. Commissioner scott this is commissioner scott. I understand that youre saying that the experience during this period in 2019 was higher than expected in terms of utilization. What kind of claims or issues were present in our population that drove this increase . Yeah, thank you for the question, commissioner scott. I will start just based on my review of the kaiser data and then certainly encourage if i may have missed anything for kaiser representatives to comment after. So what we saw, for instance, was primarily related to both Inpatient Services and Outpatient Services in terms of increases in planned utilization. On the inpatient side we observed increases that were most pronounced in the surgical category for inpatient as well as the Mental Health category for inpatient. Kaiser did inform us that the level of surgical inpatient utilization for 2018 was lower than they had observed in the past and so, for instance, 2019 was elevating to more of a level that they may observe with other Public Sector clients. They noted that, you know, increases in particular surgeries related to cardiac care, pancreas and liver procedures and a couple of high cost, high number of stays, particularly inpatient surgeries, led to this increase in the overall utilization there. And then on the Outpatient Care, the items that were most pronounced in terms of substantial increases in Outpatient Care were in the category of Mental Health, as well as radiology services. And then also some pronounced increases in the cost of care, the cost per service, for outpatient surgeries, outpatient Mental Health, and laboratory, all of which were in double digit percentage increases exceeding 10 . Some going up as high 40 , 50 increases in those particular elements. And ill ask a kaiser representatives if theres anything further to add on to commissioner scotts question. Thank you. And again to just followup. Just a few things that id add as mike was describing for the inpatient surg surgical catego, one of the areas that we observed was in the cardiac area where we did have a heart transplant that we saw. We also had some other areas such as cardiac valve replacement and cranial and vascular procedures and coronary bypass in addition to the pancreas and the liver procedures that mike referenced. So what we did see in 2018 utilization, as mike mentioned, that the surgical category was at an historic lows that we have seen and that as mike referenced that were seeing it come back up to higher levels than what we have seen in the norm prior to 2018. On the outpatient side in addition there was also an increase just in general overall in outpatient visits for adult medicine as well as Pediatric Medicine which, you know, one of the key focuses that we have at Kaiser Permanente is making sure that people are getting with their wellness and their care and so, you know, seeing the pediatric visits go up as well as ob gyn for prenatal care and other different types of adult visits, actually helped us in, you know, pit greating and understanding how to really manage the care in both an outpatient and an inpatient setting. Another area was that we did see an increase in the oncology and that increases not only in visits but also the radiology and lab as well. Commissioner scott this is commissioner scott. Do you have a followup . I didnt know if you no, im finished. I wanted to have a broad understanding of this utilization driver. And that was pretty complete. Thank you. Thank you. So, yeah, and i have a number of questions and i want to start by thanking mr. Clarke for the presentation and miss kesler for being here and available. Also i wanted to just step back and to recognize and thank my colleagues on this board for the i think the decisive and unanimous action at our last meeting to eliminate the plan redesign that would have increased copayments for city workers. I think that was an important thing, especially during during this time when everyone is struggling. I think that it sent an appropriate message that we are not in favor of and do not intend to approve copay increases that burden members and effectively discourage folks from accessing Health Services. So i just wanted to appreciate my colleagues for that and glad that were considering before us an option that does not include the copays. I am a bit concerned, obviously i mean, no secret that i come to this as a supporter of universal health care and i believe that health care should be free for all and working or not, wealthy or not and nothing in my lifetime has confirmed the need for that more than this pandemic and its disproportionate impact on essential workers and people of color. So i, of course, am troubled by any proposed kaiser rate increases, and also have had a chance over the last week in particular to talk with a lot of labor leaders and other folks on the front lines concerned about a some of the concerns theyve raised. But, you know, i wanted to ask some specific questions here on the method of calculating. I fully understand the presentation and the fact that the forecast is really based on the 2019 utilization data. Im wondering if clarke or miss kesler can look forward i mean, my understanding is that were seeing decreasing utilization rates now. So if that trend continues, is it a reasonable expectation, obviously things can shift, but is it a reasonable expectation that based on that that we should see those decreased costs and utilization reflected in our in the proposed rates period for the next cycle . Yeah, thank you, supervisor preston for the question. And i would just like to start with a short answer related to the plans that well look at later today for selffunded and flexfunded plans, for the Rate Stabilization process will help to capture some of that. So ill defer that conversation until we until i present on the blue shield and the u. H. C. Rates as a fully insured plan. Theres no Rate Stabilization, and so id like to turn it over to the Kaiser Permanente representatives to address your question as it pertains specifically to the kaiser plan. Yes, thank you, supervisor preston, for the question. And, you know, we are watching this very carefully. Obviously, as a Delivery System and not just a health plan that processes claims, our investment has not changed. It shifted in what we need to invest in to prepare for the pandemic, to prepare for a possible second wave. And we dont know what will happen in the coming months with the pentup demand for other Health Care Services. The short answer is that we dont know yet what it will look like. But if there is a change in utilization it will be reflected in your rates in future years. So we will be watching that. I just cant tell you today what will happen. Commissioner preston no, i understand that theres no crystal ball, and the utilization rates are low. And my question is if that continues so assuming that continues, is it a reasonable expectation that we would be looking at either lower increases or no increase . Or am i missing is that not a safe assumption . So i will comment and then ill ask my colleagues to comment as well. It is a safe assumption to say that the utilization patterns will be captured as we move forward. And if it continues in this way, that lower utilization would be captured in the future rates. However, its also important to understand that theres the Delivery System component, with the extreme costs that have been born by the organization as we are as we prepared for and are dealing with the pandemic. And so ill ask loreena seagrass or cindy if you have any additional comments on that. Yeah, loreena seagrass. So, kate, not much to add. I think that in general as we look at things starting to open back up, people will be starting to get more services, you know, looking at having the elective procedures that have been put on hold, to start having those done. We are starting to see some of that coming back as well. But for a long term as kate said, its something that we all need to watch very closely and well be working with our internal indiscernible to determine what that does to future terms. It would be my expectation that given that 2022 rates will be developed off of how plan experience changes in 2019 to 2020, that any lower claim experience that may evolve through 2020, would be reflected in the 2022 rating process for the kaiser plan. Supervisor preston, i will add that we do regular checkins with your actuary mike clarke and so there will be information as were receiving information and well be providing that to them. And so well be able to monitor that more closely in the coming months. Commissioner preston great, thank you very much, i appreciate that. And hopeful that we could see a reduction in the utilization and that would be reflected when were convening next year. But i look forward to continuing to monitor that. A few other things. One, you know, i just the comments around and some context around the earnings going back into, you know, the staff and patients. And a comment if you want, but just for as much for the benefit of the public, i want to put in context some of my ongoing discomfort with the seems like perpetual rate increases. See, my understanding is that kaiser in this plan period that were talking about of last year had record profits, had net income 7. 4 billion in 2019, nearly triple what the company made in the previous year. That as of the most recent quarter that kaiser holds over 41 billion in cash and investments, according to financial statements. That there are significant funding that is coming in through cares act this year, significant in the order of 600 million through this Supreme Court ruling on a. C. A. And, meanwhile, on the expenditure side, while, of course, theres funds that are going into the laudable purposes of providing care and providing for employees, at the same time, it is clear that kaiser has not really been tightening its belt when it comes to elective spending, executive compensation with over 30 ka cinch ser taking quarter of a Million Dollar for a handful of Board Meetings a year. Pretty massive campaigns like the Advertising Campaigns of almost 300 million on advertising and the Golden State Warriors 20year deal. So, obviously, theres legit expenses that any Big Organization is going to have, but im just just needing to sort of reflect and i think some of what we have heard in the Public Comments last time was some of the frustration of facing rate increases. This is not questioning the actuarial work and the data that were all relying on, i just think that in this moment when everyone is in crisis and that Kaiser Permanente is certainly part of that solution and i think that when were talking about the 2019 period this is one of, you know, great increased net revenue and really lavish spending from my perspective. And i think that, you know, more than ever that with that background, and the context and the requested increase that its appropriate that we are as we have been doing continuing to ask hard questions around treatment of staff and services for members. So, you know, im happy if theres comments on that. And i did have a few more specific questions about some of the concerns that have been raised but i would like to get kaisers response on specifically on what i mentioned the last hearing the questions around within this pandemic, the use of reprocessed n95 respirators, something that is very concerning and brought to my attention by labor leaders. And trying to i would love to either, you know, in this hearing if theres a response on that, that would be great, but i also want to recognize that we will get this moved through today and i will be working on this at the full board of supervisors and id like to also have an ongoing discussion about a few of these issues that ill be raising that im sure that fellow supervisors would be would be concerned with, especially when asked to approve this. And so i would like to know on and, again, commissioners, thank you for your indulgence with a handful of these questions. But can you, to the kaiser representative, miss tesler, can you confirm whether kaisers is using reutilized n95 respirators . Supervisor preston, thank you for the question. And id like to actually address both the comments that you had at the beginning and then the personal protective equipment. So very important to understand that we are following guidelines by the c. D. C. , world health organization, and Infectious Disease experts when determining how to use our personal protective equipment. And so i do not have the specifics, and some of my colleagues may on the reuse of the n95 masks. I know that is something in certain situations that has been deemed safe, but i will ask if others on the call have comments. If not, we can get back to you with an expert in that area. And then ill comment on the financial piece as well. Yes, thank you, kate. Good morning, my name is cindy, and im with Kaiser Permanente as well. Supervisor preston, thank you so much for the question. I think ill just say a couple of things and then i know that kate will spend a little bit more time. But each one of the items that you raised are important conversations for us to have. And i know that Kaiser Permanente is available and does engage throughout the year with you and other board of supervisors on lots of initiatives and dynamics that are going on in the city and county of San Francisco. Were a huge employer and were a huge provider and so we have a lot of things to talk about. Each of the items that you raised i think is a good area of discussion around our finances, and last years surge in income which is mostly driven by investment results and the stock market. And youll see the corresponding dip on the First Quarter of this year reflective of that. And that in and of itself could be an hour conversation. Compensation for our executives, and our investment with the warriors, i mean, these are dynamic and complex important items that i think that are really worthy of discussion. On the p. P. E. And part of the conversations that we can have are detailed, but what i wanted to share in addition to what kate said is that any we have set up ways for our employees and our Union Partners to engage with kaiser in various ways, specifically about p. P. E. , but in addition to any other concerns that they have. They can raise them at their local medical office with that leadership. They can raise it at the regional level. And theres also a weekly call that happens between our labor partners and the vast majority of them are on that with our National Leadership to talk exactly about their concerns about p. P. E. Whether its volume of supply, how they can make sure they have access to the right p. P. E. , and their concerns about what is being categorized as the right p. P. E. And the reuse of p. P. E. S or the sanitation of p. P. E. S. As i am sure that you can imagine, a complex dynamic need to ramp up quickly. Soy we take very serious seriously our responsibility to have p. P. E. For our frontline employees, but also not just for today, but for the next coming period as we dont know, as kate said earlier, where there would be a second surge and how that will show up. So there are methods to engage between our employees on union and nonunion employees and our leadership to express those. Commissioner preston so i let me say that and i appreciate the answers. My understanding regarding the repurposed n95s is that they have not been deemed safe. I am not the expert on that. So, you know, happy to engage further with information. And my understanding is that the c. D. C. Has made clear that theres no data to support the effectiveness of decontamination methods and repurposing them. And the f. D. A. Has not cleared them. So this is a major concern. I understand that you stated that theyve been deemed safe. Im sure that offline we can get to the bottom of that, but i think that the fact is that this has been raised. And let me say that more generally is that as we go into with this board and the board of supervisors approval of the contracts that, of course, are dictated by last Years Experience that were also in todays reality, right. And looking at some of these things. So i appreciate that we can have both conversations. Absolutely. And ill just add, you know, we are following both the c. D. C. And the f. D. A. Protocols around reuse and sanitation of masks. So i think that is a worthy conversation for us to have. And then the other concept, and, again, kate can add more you know, she mentioned in her statement that were slightly different because were not just processing the claims or the health plan, that were actually the hospitals and the providers. So our dynamic is going to be a little bit different. While we have certainly seen areas where utilization have dawn downgone down, and we haved many elective surgeries but not all of them. We have not closed our Emergency Rooms and our urgent cares or, you know, large medical centers and not able to provide services. So we still feel very responsible for delivering the care and we just have to do it in a bit of a different way. And we also have, and i mentioned this earlier, that we are working right now on our reentry back into what our next normal looks like. We are significantly committed to prevention and wellness. So delaying mammograms or colooscopies any longer is concerning to us as to our members. So those are priorities for us. We expect to get caught up with those things that we pushed off to a later date for safety concerns. We expect to be caught up in those during this year. As soon as possible, but we do expect to see quite a bit of utilization increase, appropriate utilization, that needed to be delivered but hasnt yet been done between now and the end of the year. And so its not just a matter of we need to start providing care and it wont be seen as an increase, there are lots of services that we will see happen and spikes later in the year, but when you smooth it out over the year it will look much closer to a normal year. Thats our expectation. But as kate has said several times, you know, unclear whether theres a second surge and we need to be you know, careful, etc. , as we reopen the state. But i appreciate the comments and i look forward to that conversation with you and other board of supervisors. Commissioner preston thank you. And just a few other questions and then ill try to keep them short. I know that other commissioners may have questions. And i expect that well have some Public Comment as well. Another thing that was brought to my attention was in the last week in discussions with labor leaders what was the claim that asymptomatic covidpositive nurses were being told to complete shifts rather than being sent home if they were asymptomatic. And so i want to know if you can confirm that kaisers policies is that a nurse is testing positive or a symptom attic during this crisis. Are they to continue working or sent home or do we get that information elsewhere . I have not heard that. So i will follow up with you. We i certainly would expect us to not have anybody who tests positive with a covid19 test to be providing care to our members. But i have not been asked that question before. Commissioner preston okay, i hope that is the policy and this is from kaiser south facility that serves a lot of the residents so i look forward to clarification on that. Another question on specifically on the issue of Behavioral Health and without getting too far into the kind of weeds of Service Delivery, obviously some critiques around the delivery of timely and appropriate behavioral Health Services is ongoing discussions with n. H. W. And others around those issues. And i think that my question is just how the Service Delivery side relates to the rates. So just as a hypothetical, if services and maybe this is a question for mr. Clarke. If the services do are not delivered as promised in the course of the contract, how does that impact the rates . Is there a rebate . Factored into next years rates . Or actually not factored in the rate discussion . Yes, supervisor preston, ill be happy to describe what i observe in reviewing kaiser underwriting and then id ask kaiser to fill in anything that i dont address. All i can observe is what actually presents in the data on 2018 to 2019 changes on a per member per month cost basis for all of the Service Elements that roll out into the broader categories like inpatient care and Outpatient Care, prescription drugs and so forth. So what i observed, especially in the outpatient data for Kaiser Permanente, for sfhss members from 20182019, were sizeable increases on a percentage basis in both costs for service and the overall average utilization of services by sfhss members. But, again, that is just simply reviewing the information kaiser presented. We have not audited that information. So i would welcome kaiser to speak on your observation. I hope that this helps at least to clarify what i see as the aon actuaries supervisorring the plans work. But i would ask for Kaiser Permanente to comment. Great, id like to ask lorena, could you comment please on this section . Yes, thank you. So thank you, thank you, supervisor preston. As mike said, we have seen a number one overall access improvement in Mental Health and Behavioral Health. And so we have seen utilization increase in those areas. And we have been reflecting that in our utilization and experience. Weve also been able to look at actually better reporting on this than we have done in prior years. So we are also capturing that utilization and showing that because what we had is sometimes something would have defaulted into the general outpatient visit category. And now were doing a better identification of that with our new system of what is Mental Health and what is, for instance, Substance Abuse visits. And so all of that is being rolled up. And so in general were seeing more utilization and better access overall in that reflective in the information. Sorry, if i could jump in to clarify and sharpen the question. I understand that in the course of engaging with sfhss staff and in terms of, you know, whether or not the promised services are being provided and Behavioral Health or otherwise, right, and thats a function, obviously, that staff plays. I think that my question is just to the extend tha extent that tp in the promised services and what is provide. Whenever does that come into the rate discussion . Does it affect the future years increase rates yes supervisor preston, kate again. This is in the utilization. So if it is as lorena was describing, if the services are used theyre in the utilization. Now as far as expectations i would imagine that youre asking about to see a Mental Health provider or a Members Satisfaction we track that very closely. We have indepth discussions with executive director hants that is really separate from the actual rating discussion because the utilization wouldnt be in the rating discussion and the lust eytheutilization. Commissioner preston okay, thank you. Ill follow up with the director and staff just around getting a better handle for myself on how that process plays out. I would add, supervisor preston, that were happy to have that discussion at any time. Mental health is an area that we have been heavily focused on and have had significant investments in making sure that we are providing increased capacity. And making sure that were investing in the facilities and making sure that we have the appropriate access. So happy to have that discussion and to get into that further. Commissioner preston thank you. And the last question, and this is specific and related to kaisers interactions with Health Care Workers in u. H. W. I understand that the members voted to ratify kaiser contract in early may and then several weeks later that kaiser has contacted u. H. W. To propose implementation of an agreement that would effectively gag the a gag order on members from publicizing perceived shortcomings with the kaiser system. And theres a dispute ongoing about that. And i just want to be my final question is really the status update on that, and if kaiser commits to ceasing attempts to silence employees through the use of any side letter of this type. Yes, thank you so much for that question, because it is really timely right now. I want to be really be clear on what it is that we have asked in this process. And what it isnt. please stand by zvans. It is not a gag order, it is not saying that any individual employee is forbidden from communicating or sharing or expressing their concerns or positive perspectives, as well. It was a previous agreement in place since 2015 and is in place in our other Labor Partnership agreement that we have. Supervisor preston well, thank you for that. It still sounds concerning in my perspective that we rely not just on the individual patient therapists and others but the union in the longterm that there are short comings in the system, to bring those to light. I look forward to engaging with you further on that, and i look forward to colleagues, thank you for your indulgence and lengthy comments and questions here, and look forward to if these rates are approved today, look forward to communicating with my colleagues at the board of supervisors there and get further answers to my questions before then. Thank you. Just, supervisor preston, if i could, just on this last issue, our reason for requesting this is really around developing that collaborative communication and approach. We really want to work collectively together and solve these issues as partners, and so we feel this is just a piece of setting that foundation. Understand there are complexities around that, and it needs to be discussed, but that is our intention . And i just want to close with your questions. It feels like a half a dozen topics, but it could be a few more. But these are items that are being discussed, and i really appreciate you raising them and starting that dialogue here. Supervisor preston and thank you for your willingness to have the conversation, and thank you to all the frontline workers who have really formed both the questions and stood in the ontheground reality with folks that are living this crisis. I appreciate everyones work on this, and thanks again. Thank you. President breslin any other comments or questions . Vice president follansbee yeah, this is commissioner follansbee. I think [inaudible] Vice President follansbee regarding potential usefulness which is, of course, not firmed. So the bottom line is if a patient did not get their medications because of some complicating thing, we shouldnt be rewarding the rates based on the unavailability of medications because of overutilization elsewhere. One other thing i want to make very clear is we as a board have a very Important Role to make sure that people can manage their health care as appropriate. Theres been a National Trend of underutilization of Emergency Rooms for things like strokes and heart attacks and progress with incredibly body outcomes. As we talk about rate doe rate to make sure that our members, regardless of this effect on future rates is critical to a healthy population. So i dont want anyone to walk away from the board feeling today that we are urging them for some future rate discussion to not utilize the health care that they are entitled to in any way, sense, or form including Mental Health. And then, the last thing i want to mention is c. D. C. Guidelines around personal protective equipment and issues. I think were all aware of the issues that happened in some of these agencies that are novel or enhanced. And im hoping that these policies that are prevalent in all of the medical centers and clinics are being reviewed by the expertise that exists within kaiser itself, and as an Infectious Disease physician, now retire, i will applaud my colleagues and hope that theyre having discussions into personal protective equipment, used and not used and not simply relying on some federal guidelines, which, when i read them, to some extent, theyre appended by when appropriate or when possible, and that is not really in the interest of employee safety or protection. So im assuming that not only kaiser but all of our Health Care Partners are listening to their own expertise as they develop programs and plans for issues such as this. I dont have any questions, i just wanted to talk. Thank you. President breslin any other questions. Yes, commissioner. This is clare zvanski, and i want to get to utilization because i do Pay Attention to marinas demographics and the reports that she puts forward. And when i was listening to some of what lorena was talking about in regards to setting of rates and utilization, i noticed that no one mentioned age, and while im looking at and i appreciate all of the kaiser staff that was here and appreciate the comments by supervisor preston and totally appreciate dr. Follansbees comments, im thinking overall. One, is this demographic that were working with here with early and active retirees, do we have some kind of skewing of the average age that were looking at, and does that have an impact on utilization [inaudible] really are impacted by the age of the population that eve were looking at here. And the last thing that i want to add a comment on, it doesnt impact currently. But while the utilization may below right now in 2020, its still a fact that people are afraid to go out. And the message to our retiree members is you need to get your health care, and youre not walking into a contaminated area at kaiser. The people that are hospitalized with covid infections, its one thing to say okay, youre symptomatic and you have the virus, but if youre hospitalized, and you need that treatment, and people are staying anywhere from two to four to six weeks being hospitalized and under incredible treatment, that the cost of those kinds of treatments will probably offset the utilization of any other kind of utilization that most of us are used to, and i wonder if you have any speculation with regard to that. Something im really interested in is how age may or may not have influenced rating. Thank you. Thank you for your question, commissioner zvanski, and welcome back to the Health Services board. I very much look forward to working with you as youre welcomed back to the Health Service board today. Thank you. Let me address the first part of your question, and then, id like the kaiser representative to address the specific covid19 treatment impacts. This particular segment of the sfhss membership in the Kaiser Permanente plan is approximately 90 of the members or roughly 50,000 total members and their dependents and approximately 5,000 total lives are early retirees and their dependents. And as part of our overall review, when we periodically work with kaiser to evaluate costs and utilization information and also produce the renewal, we do look at employee utilization cost and utilization. I fully recognize today that as we have this discussion, we routinely present to the board every year our experience on Blue Shield Health plans and united city plans, and we do not on Kaiser Permanente. So we will be working to present Kaiser Permanente on an ongoing experience in a similar formality. Recognizing that that was not part of this years cycle and i dont think its been a part of prior years, so clearly, something we need to bring to the board Going Forward is the same type of information on kais Kaiser Permanente cost and utilization overall every year. One statistic that we reviewed this year is 92 or 93 of total covered lives in the kaiser plans between active employees and retirees is the difference between the 2018 and 2019 experience. We call that persistency. Its a basic word, but it basically means one percentage of the total population was covered last year because we would like to see patterns of change not only on the entire population but also whats happening on a constant enroll population on an aggregated basis between one year and the next. In that instance, we having observed certain demographic changes. You will recall reetas report from two weeks ago, there was a risk of about 2 to 3 in this kaiser population, so were keeping a close eye on that as well as the overall utilization pa patterns and the data. With that, i will turn it over to kaiser to answer your second question. Hi, commissioner zvanski. You were breaking up a little bit on the second part of the question, and i think it had to do with the overall utilization during covid and covid related treatment and others, so maybe if you could clarify what youre asking, and ill make sure that we answer that. Well, i was just wondering that it seems to me that there are extremely high costs in treating covid19 in the hospital, given the nature of how it needs to be treated, isolated, the intense staffing, and also the extremely lengthy actual hospitalization. And if the costs of those treatments and i dont know how many patients kaiser has with covid19 and if any of those are from our population, our membership. But the extreme cost of those treatments, that would really supersede utilization rates that would be set by what we normally look at as the everyday treatments of going to kaiser, whether its the colonoscopy or taking the kids in or whatever it is. Seeing that, in my brain, it says the costs to those hospitals are going to exceed anything that people are talking about with current utilization of low regular health care benefits. Does that cover it . Yes. Thank you for that. Were all watching this very closely. Youre correct. Were all watching the severe covid19 cases, and they could be very costly. Whats key is reviewing information regularly and reviewing your actuary and the board on whats happening with the utilization. So there is the covid19 costs and there is the possible pentup demands that can be very real, and then, the possibility of a second wave of this. So a lot of unknowns, but youre right. Those are the types of costs that were watching very closely as we go forward. And as it relates to how your rates will be impacted, we will be looking at this years utilization when developing the 2022 rates, and that will play out in that rate discussion. Yeah. Just to add one small additional item as part of what kay was saying around the pentup demand, etc. , as kay said earlier, we have been partnering with test city San Francisco, but also in our own facilities, theres the covid19 testing, the expectations and desires of Many Employers to figure out that dynamic before they return to work, as well as the Antibody Testing that were really just starting to get our arms around in terms of the Antibody Testing and if were fortunate enough seeing, if its produced before the end of the year, the costs associated with delivering vaccines, etc. So theres a lot of nuances that will happen, not just for those that end up in i. C. U. Care in the hospital and in those dire straits. I appreciate that. And because we represent a lot of the folks that are first line workers we have police, fire, paramedics and im also hearing from a lot of my colleagues working at sfgh who are meeting people every day who are coming in for services through our facilities, as well. And so all of those employees and we are disaster workers the concern is, youre right is youre right about testing. I think a lot of employees feel that if were on the frontline, we need testing, and possibly periodic testing, multiple testing. Its not like i test today, and oh, im covid free, and hooray, i go off. Its going to be more than that, so i appreciate your comments. Thank you so much. President breslin okay. If there arent any other Board Members questions, ill ask for a motion supervisor breslin, if i could go back, supervisor preston asked a question that i was able to get an answer back on. If any of our care providers test positive for covid19, they are put on a paid furlough for two weeks until they test negative, so they are not asked to work. Whether they have symptoms or not, if they have a positive test, they are on a paid furlough for two weeks until they test negative. Thank you. President breslin okay. Does anybody commissioner breslin, this is randy scott. I would move that we accept the presentation as presented on page 21 of the presentation. Number 1, that 5. 8 insured plan increase from 2020 to 2021, and the resulting rate cards that are identified in the presentation. President breslin is there a second . Sorry. This is commissioner hao. I second that. President breslin okay. Now well have Public Comment. Remember, this is item number 4, kaiser. Clerk thank you, president breslin. Were going to take a 30second pause to allow for members at home who are watching us on sfgovtv to hear this advisement. I want to remind everyone calling in, you must press onezero to be added to the queue. Otherwise, you will be just living to the listening to the commentary and questions by the commissioners and mr. Clarke, so were going to wait 30 seconds for the callers. Thank you. Clerk all right. Well now begin the Public Comment for item number 4, Kaiser Permanente nonmedicare rates and premium contributions. Moderator, will you please open up the lines for the first caller. Operator you have two questions remaining. Clerk hello. Good morning. Hi. This is [inaudible] from the San Francisco labor council. I understand these rates need to be approved for the upcoming fiscal year and but it does not excuse kaisers poor performance regarding p. P. E. S. It does not excuse kaisers attempt to silence and gag workers that work for it. City employees need to go somewhere where they can go and know that theose workers have the absolute right to speak out against kaiser in a concerted and collective way, and that i think that the board of supervisors needs to have a hearing on this and change these timelines so the community can, if need be, look for someone else clerk miss, thank you so much, but your time is up. And take care of the workers. Clerk thank you so much. We appreciate the comment. Thank you. Moderator, can we have the next comment, please. Operator you have two questions remaining. Hello. My name is sylvia alvarez. I respectfully urge the commissioners to vote no on the increases to the people of the city and county of San Francisco. Kaiser has millions that they can spend more wisely to address the Health Issues of its members. Thank you. Clerk thank you very much. Moderator, can we have the next caller, please. Operator you have one question remaining. Clerk hello. You are on the Public Comment line. Hello . If you are here to give Public Comment, your line is open. Okay. Moderator, can you please see if any other callers are left on the line, please. Operator you have zero questions remaining. Clerk okay. Thank you very much. President breslin, that concludes Public Comment on this item. President breslin okay. So the motion has been moved and seconded to approve the staff recommendation for Kaiser Permanente nonmedicare rates and premium contributions california members. All those in favor, signify by saying aye. Any opposed . All right. Then, this is unanimous with the ayes. Okay. The motion passes. All right. Now, i suggest that we have a tenminute break at this time since weve all been sitting here for almost two hours, so we will be back at 1 10. Is done by mike clarke from aon. Mike clarke, aon. Next slide, please. This will review a quick preface on rate setting methodology. Ill focus specifically on blue shield of california plan elements. A 2021 plan rating summary of the blue shield renewal, present the monthly rate cards for the access plus and trio monthly plans for early retirement employees, close with a recommendation for Health Service board action, and information in the appendix is information that i will not be reviewing in todays presentation but is available in the deck. Next slide. Next slide, please. So in the last presentation, i reviewed this page in detail. I want to just remind on only the flex funded column as that pertains to the Blue Cross Blue Shield of california h. M. O. Fund. Flex funded means theres an insurance approach where there are claim dollars based on services by members. These dollars are paid by the trust but with fixed costs for services and health care. For example, this covers physician services, laboratory costs, radiation costs, and other services that are typically part of a physician element of delivered care. As well as plan Administration Fees and large claim reinsuran reinsurance mechanism whats calling pooling. I as the aon actuary set the recommended plan rates for the access plus and trio plans using cost determined trend plan assumptions that i validate as the actuary with required pooling fees and legislative fees that we also provide scrutiny over as the actuary. In the last row, you will see that this flex funded plan does have application of the Health Service board Rate Stabilization policy, and to the extent that there are claim variations from original forecasts in a given year to address the concepts that supervisor preston asked about in the earlier presentation, any change in experience will flow to the Rate Stabilization reserve for future reuse in rating of the flex funded plan. Next slide. Same fivestep process that we used before, accounting for any design and head count changes, which again, no plan design changes are proposed for 2021 for this plan. For blue shield specifically, before Rate Stabilization adjustment, access plus would be recommended increase of 4. 4 , and trio, 7. 1 . I will speak shortly as to the difference in rating recommendations for these two plans. After Rate Stabilization adjustments, the increases are less than before Rate Stabilization adjustment because we have a surplus in Rate Stabilization that was approved by the Health Service board earlier in this rates and benefits cycle, and so the blue shield access, its 4. 5 , and trio, its 6. 3 . You can see the placement of the plans on this page that we reviewed earlier in the kaiser presentation. For the monthly total cost rates that are recommended for each plan, comparing 2021 recommended rates to 2020 actual total cost rates and showing the dollar difference and percentage difference in those rating forecasts for 2021. Next slide. And this is a reminder of the two contribution approaches that are displayed on rate cards for the active employees in the city and county of San Francisco. Next slide. And a reminder of the three contribution components from the employer from the city charter for early retirees. Next slide. And with that, i will start with a recommendation to the Health Service board and then explain the rationale for these recommendations. The staff recommends that the Health Service board approve the blue shield access plus plan renewal proposal for a 3. 6 rate increase from 2020 to 2021, the blue cross trio increase of 6. 3 from 2020 to 2021, and the rate cards presented in the Materials Today for these plans. Next slide. As with the prior commentary on kaiser, we present the rate cards for the two employer contribution strategies for the city and county of San Francisco, recognizing that the total cost rates that would be approved today would also apply to active employees and the other employers with their employer contribution sharing strategies, and the early retiree rate cards shown in this presentation apply to the early retirees who earn the full city contribution contribution levels based on dates of hire and Contribution Service with those determined by the city charter formulas. Next slide. So ill present the summary. Blue shield renewals for the two proposed plans. If you weight average the access plus recommended increase of 3. 6 and trio at 6. 3 , that results in an overall combined increase for the blue shield plans in total of 4. 4 . You can see the elements of the rate plans that ill go through shortly. They include 2021 pharmacy and medical claim costs that are net of pharmacy rebates, certainly medical services, including physicians. The fees charged by blue shield that include the Administrative Services only or a. S. O. Only fees, the Affordable Care act fee that i will discuss shortly, the Rate Stabilization surplus buydown that i talked about earlier, where in prior years, we had a buyup of the blue shield plans, but there is a buydown to the Rate Stabilization applied to the rates this year. In march, we reviewed with the Health Service board the overall blue shield plan expenses on a per employee, per retiree, per month basis. And in that discussion, we reviewed how the plan experience increased about 7 per member from 2018 to 2019, and this is slightly higher than our forecast Health Care Cost trend of 6 . Trio has a higher recommended increase than access plus because the trio plan has substantially higher large claim experience in 2019 than access plus, and ill review that shortly on the next slide. The stabilization adjustment in rates, as i mentioned, changed from a buyup in 2020 rates to a buydown in 2021. So all else, that creates a favorable change by 4. 4 . And that 4. 4 aggregate increase, it was 8. 8 going into the 2019 plan here. So this falls in between the recommended increases for each of the two path renewal cycles. These are the administrative fees on a per employee, per retiree, per month basis. This is increasing by 2 in the upcoming here, which is consistent with the National Trend for administrative fees. The large claim pooling fee is increasing by a high percentage, 18 into 2021 plan year, but it reflects a significant increase in the claims that were reimbursed back into the trust for us in the plan that for individuals who exceeded 1 million. In 2019, there was 9. 3 million in large claims exceeding 1 million per person that were reimbursed back into the trust versus 3. 7 million in 2018. And so that large increase in the large claim pooling payments back from blue shield resulted in a high increase in the large claim pooling fee. And then, the Affordable Care act has a Patient Centered Outcomes Research Institution Fee that had been scheduled to expire after 2019, but it was now extended another ten years, through 2029, as part of the federal secure act that was passed in december 2019. So that fee is 45 cents per retiree and per employee. So overall fixed fees for blue shield are increasing 7. 4 on a per employee per retiree per month basis. Next slide. So the rate cards follow, where again, ill present on the active employees for the two employer contribution models and city and county of San Francisco and the early retirees. Next slide. We start with access plus. This shows the monthly rate and contribution changes proposed for 2020 to 2021 for the early retirees and the 939383 contributions. The early contributions are the top set of rows, followed by the employer contributions in the middle, and the total cost rates at the bottom of the page. For access plus active employees, all rates are increasing 3. 6 as the contribution strategy is a proportional sharing. For the early retirees, the anchor for the employee contribution is the 729. 19 per month in 2021, which was derived based on the tencounty survey and presented and approved by the Health Service board in march. And so the monthly employer contributions increased by 3. 5 . Next slide, please. This and i apologize for the technical glitch. I understand i could not be seen for a brief moment, but hopefully, everything is working now. So for access plus, this shows the change in contributions for the early retirees, and the 1009683 contribution strategy. Next slide, please. This is the access monthly rate card for 2021 as proposed today. You can see the components and the total rate are the medical costs, the vision core plan, the 3 sustainability fee, and the reduction for the buydown for claim stabilization, followed by the application of the tencounty amount, the actuarial difference in the employee contribution based on the city charter employee contribution formula, and then, the application of the cost sharing, and finally, too, the member cost sharing premiums at the bottom of the chart, along with a comparison to 2020. Next slide shows the same information but for the active employees, 1009683. Next slide. And then the same set of charts but for the trio plan. The 6. 3 is for the active employees that you can see is proportionately shared. And for the early retirees, there is the the the employer contributions are determined by the city charter formulas, and so the difference becomes the contribution that the retiree pays. Next slide. And this is for the 1009683 employees, along with early retirees. Next slide. And the rate card for trio for the 939383 employees. Next slide is the same information but for the 1009683 early activeretiree employees. So staff recommends that the Health Service board approve the blue shield access plus plan renewal for a 3. 6 rate increase, theably shield trio plan for a 6. 3 increase, and the resulting 2021 monthly rate cards that i just presented. And if you could go to the next slide, i will ask a blue shield representative for a statement. Good afternoon, everybody. My name is paul brown. I am area Vice President for account management at Blue Cross Blue Shield california. Thank you for allowing me to speak on the 2020 renewal. 96 of our rates go to medical and pharmacy claims for sfhss members. Health care inflation is a reality both locally and nationally, and we are continuously fighting to control Health Care Inflation. For example, the cost of specialty drugs for various medical conditions have escalated far above general inflation. In fact just recently, last week, the f. D. A. Approved the most expensive drug ever, a 2 million drug for an infant muscle disease that didnt exist before. Locally, we continue to work with our provider partners, including brown and tolen, hill positions, ucsf, dignity, and others, to find innovative ways to manage Health Care Costs for members. The average rate change over the last eight years since weve had those provider partnerships in place has been approximately 4 . We will continue to work to control overall costs. A recent example is the announcement that alteas, a Company Launched by blue shield in 2019, merged with brown and tolen in order to provide their 2700 doctors with next generation tools and technology that will allow them to spend more time with patients in order to improve the quality of care and reduce provide burnout. Blue shield, our mission is to provide high quality, Affordable Care for all of our members, and we will continue to drive that for sfhss members, as well. Thank you very much. Now, thank you. And with that, would you please go to the next slide. Please, commissioner breslin. President breslin i was just going to ask, are there any questions, but ill wait until you finish the slides. Yeah, so just restating the recommendation and happy to take commentary. This. Commissioner zvanski this is commissioner zvanski, page 22, the eaprocess for the earl retirement employee, mike, can you explain what thats all about . Yes, i can. So the base part of the city contribution employer contribution formula is the tencounty amount, and anthony, if you could actually flip back probably three slides three to four slides, but ill guide you, just so i can have the slide up as i address commissioner zvanskis question. Two more slides, please. And one more slide. So lets reference this slide because it also shows at the bottom of the slide that difference. So today, the retiree only, without medicare, in the trio plan, based on how the city rates and charter work, pays 11. 95 im sorry, pays 23. 87 per month for coverage. So that is in the first column of the early retirees. So the retiree without medicare column, the nexttolast number on the page, the 23. 87. Its now going to 35. 82, which commissioner zvanski identified as an approximately 50 increase, or an 11. 95 increase in member contribution. The basis of the city charter employer contribution formula starts with the tencounty amount, and that tencounty amount for 2021 is 729. 19. It is approximately 3 over the 2020 amount that is approximately 705, and with the actuarial adjustment, you see increases. The actuarial difference portion of the formula, its also shared proportionately in the retiree prop e portion of the formula. But with the tencounty amount only going up by 3 , that means the aggregate city contribution increase is going up by less than the 6. 3 that the total rates are going up. And so that creates a circumstance where the proportional increase for the retiree contribution is increasing more. And because of a relatively low figure and again, im saying that actuarially, not as a judgment on the figure, but just from an actuarial standpoint, 23. 87 going to 35. 82, you know, does create this 11. 95 increase, but does create a percentage increase environment where that specific contribution is increasing by 50 . So in the end, its all about the tencounty amount and how thats changed versus the 2020 amount, then guiding a city contribution increase thats less than the 6. 3 overall rate increase. Im certainly happy to take further questions, commissioner, if you have them, on this. Commissioner zvanski no, thats all i asked for. And my apologies to commissioner breslin. I should have said through the chair, so i apologize for that. Thank you, mike. Thats a good explanation. I appreciate it. President breslin any other commissioners comments . Vice president follansbee yeah, this is commissioner follansbee. I have a question. As i recall from our initial deliberations over the development of the trio option, one of the big components that let to essentially a significant rate reduction for that trio plan was that the Center Hospitals were not available as an option to trio members. Over time, that has changed. Finally, blue shield signed contracts with sutter, and so im just wondering if you can speculate a little bit about whether the marked increase in claims experience, was that because there was just more serious medical conditions, like we heard in the last presentation, heart transplant, or does it have to do with a new plan for the trio members that didnt exist. I bring it up because the difference between the trio contribution and the access plus contribution is being whittled away, its quite a bit of difference between last year, the two plans. Let me make another comment. This is paul brown, blue shield, and mike, feel free to add on. Specifically to the sutter comment, when sutter requested to join trio, if you may recall, they were not originally in the network. They joined. We were able to negotiate a contract that had no material impacted impacts on the rates at that time. They came in, and we could not afford to change their rates. The coming of sutter into the network really isnt material to the increase this year, and, in fact, im doing this from memory here, but in our utilization review meeting with staff, i believe a greater share of claims are at ucsf, not at cal Pacific Medical center. I think overall and mike can comment more specifically on this the gap well, let me go back a few years. The gap between access plus and trio originally was about 10 , and youre right. Its narrowing this year. Overall, trio operated as we intended it. Unfortunately, in this coming year, this appears to be a there appears to be a disproportionate number of claims between trio and access that are driving this. We are on the risk and liability for any amounts over 1 million, but sfhss is up to 1 million. So to the degree theres more of those, it does have an impact disproportionately on the trio renewal. Yeah, and ill make a comment a couple of additional comments, so thank you for that. So number one, there is a large plan underway for the plans presently, so Vice President follansbee, to address some of your questions, that is driving some of the audit activity that was spoken to by folks at the prior meeting from sfhss, so just to be aware of that. And specific to this year, there were eight total claimants that exceeded the 1 million stoploss point. But in particular, five were 2 million and above, including one 3 million claimant and one 4 million claimant. As i said, we only get the dollar amount, not the identifying information, so were reviewing the dollar amounts only. The large claim experience this year was magnified, and thats presented in the statistic i shared earlier about how much more in dollars was reimbursed in 2019 by blue shield for the large claim pooling than was in 2018. President breslin any further questions on that . Commissioner zvanski this is commissioner zvanski again. Through the chair, mike, what you just talked about or actually, i guess, mr. Brown, as well, if the point of having the difference between access and trio was the sutter was inclusion of sutter or exclusion of sutter, how could they have been allowed to join when that was the basis of having the two separate options . Im not sure i understand why now sutter is available in both options . It doesnt it seems to defeat the whole point of why we were really adamant about that and why our members were adamant about that, and especially our labor our labor folks were adamant about having sutter come onto keep costs much lower for members. Could you explain that, please. Let me take a stab at that, commissioner zvanski. Sutter was initially excluded, and we went for a period of time without sutter, and the care was successfully redirected to other facilities. We we, working with brown and toland, working with ucsf, successfully redirected care to nonsutter facilities, and it was at that point that they came to us, asking if they could please become part of the trio network. And our request of them was that it cant be it cannot impact our rates, so they had to come in at a price point that im not at liberty to disclose here, but they came in at a price point that made it cost neutral for trio in general. Our thought was if it means better access in particular for some lines of service like maternity, where that is a common referral pattern from brown and toland from ob gyn, and the care isnt affected, thats what we want. Its about actively working with providers to get to the right price point. Does that commissioner zvanski thank you very much. Thank you. President breslin any other commissioners questions . I have one. In these flex funded plans, mike, do you can you see the actual these claims are active with what the costs is . I dont know why im getting an echo here. President breslin, im happy to answer that. There is an online portal where we can access claim information, and were also being provided claim information as being separately reported by the blue shield account team to us. And then, on a semiannual basis, we work with blue shield as they prepare very detailed information to share with sfhss and aon as medical and pharmacy claim experience, again, on an aggregated deidentified basis. But it allows us to see greater detail on the claim experience thats been captured by blue shield. So we have access to that information for any experience that is directly claims that passes through to the trust. So those would include hospitalization costs, for instance, or other facility related costs. The cappitatiitation figures te related to blue shield, we review those per month, but those are aggregated figures that blue shield provides us. We do look at those capitation figures from one year to the next, the costs for physicians, laboratory radiology, othalong with some other elements of care, so that is the type of information that we gain access to within aonto support our review and the underwriting process that i described earlier in this presentation. President breslin okay. And so when you you start the new rates, looking at last years rates, and now that weve had flex funded, you can better see what theyre actually charging or what they actually cost. But you know, im always wondering about the starting point. I know for years, weve had blue shield, and for many years, i, for one, and other Board Members felt that they came in with very high rates, and we had a tough timekeeping rates down, so they had the one thing ill sorry. Go ahead. President breslin maybe you see that now. The other thing is the all claim database that, you know, Marina Coleridge spear heads from the sfhss side, and we work closely with marina to understand that and how that relates to the information thats reported to us by blue shield both directly through their account executive team and the portal. Well fully, going back to Marina Coleridges report from two weeks ago, there is a high risk in the membership of the blue shield plan compared to the Kaiser Permanente plan. The costs are higher in part because of the higher level of health risk that presents and ultimately reflected in the risk or data that marina produces for the board. President breslin okay. Thank you. I just wanted to point out that early retirees, it says and family, but that means a member with two dependents, maybe a spouse and a child, it results in 16,000 a year, which is a lot of money for a retiree to pay versus someone who was able to work a lot more years. And the trio, as commissioner zvanski pointed out, is going up a lot, too. But we have less choices, and less choices means less competition and higher prices. And were not going to change that here today, but im looking at this, and all we have is blue shield and kaiser. We really need more choices to keep these costs down somehow. I just find this is getting almost two expensive for an early retiree with two dependents. Sure. And if i could comment, with regard to how the employer contributions are set based on city charter formula, and this is illustrated by that earlier early retiree bar chart in this presentation. The city charter formula does provide for a higher level of employer contribution for covering that first dependent as a retiree, and so that alludes to the gold bar in my threecolor bar chart earlier. The light blue for the tencounty, the dark blue for the actuarial difference, and the gold bar for the employee contribution. However, there is no incremental for the employee or second higher dependents. The employer contribution for a given plan is the same between the retiree plus one and the retiree plus two or more tiers. President breslin right. Okay. Thank you, mike. Are there any other questions from commissioners . Vice president follansbee this is commissioner follansbee. I just want to make a comment in light of the questions and questions that you had, president breslin, and that is that we heard about the saltais contract, and the issue with blue shield is they deal with multiple medical groups. The oakland medicals database, and one of marinas favorite terms was efficiency. I suspect blue shield will be looking into efficiency and maybe be able to evaluate any added benefit of an outside agency sort of assisting providers in that regard and whether that could be generalized to other medical groups. Blue shield must have quite a task, looking at different medical groups. So theyve got competition within their own system to try to become, you know, maybe more efficient, and hopefully, that will end up with an adjustment of rates for us in the future. President breslin okay. Any other comments . If not, i would entertain a motion. Vice president follansbee this is commissioner follansbee. I recommend that we follow the recommendations for the blue shield 2021 plan rating as outlined on slide 10, including the monthly rate cards. Commissioner scott this is commissioner scott. I second the motion. President breslin okay. All right. Public comment on this item . Clerk excuse me. This is commissioner zvanski. Is it slide 10 or slide 27 . Clerk the recommendations slide is just repeated throughout the presentation, so it is slide 10. We just use the same recommendation card throughout the presentation. If that makes sense. We just duplicated the information. To be accurate, i can say slide 10 and slide 27. Clerk and now were going to move to Public Comment. Were going to give about 30 seconds for sfgovtv and live stream to catch up for Public Comment. So were going to be silent for 30 seconds, and then, well begin the Public Comment directly after. Clerk all right. Moderator, we will now begin the Public Comment section of this item. Please on the line, please remember to press onezero if you want to give Public Comment. Moderator, will you please open the line for the first caller. Operator you have two questions remaining. Clerk hello. Good afternoon. Youre on the Public Comment line. Hello . Good afternoon. If youre on the phone line, youre on Public Comment, and your time will begin when you give your name. Moderator, can we go to the next question, please . Operator you have one question remaining. I urge the commissioners to please vote no on any further copay increases and premium increases. Its a monetary hardship for the retirees. And due to the pandemic and economic depression, the fiscal burden is only going to increase. Thank you. Clerk thank you very much for your comment. Moderator, will you please move to the next caller, please. Operator you have one question remaining. Yes. My name is joseph newen, and i would like to say that with covid19 and the depression going on, that you should reconsider this whole thing. Thank you. Clerk thank you very much. Moderator, will you open up the line for the next caller, please. Operator you have zero questions remaining. Clerk thank you very much. President breslin, this concludes Public Comment. President breslin okay. We have a motion on the floor. The motion was to approve the staff recommendations, which was blue shield rates and premium contributions. All those in favor, signify by saying aye. Are there any opposed . All right. Its unanimous. Now we move onto item number 6. Commissioner zvanski commissioner breslin, this is commissioner zvanski. May i make a comment before we move onto the next item, please . President breslin sure, go ahead. Commissioner zvanski prior to this meeting, i did a lot of research with regard to what would happen if we did not pass these rates because were still getting the Public Comment of members who are very upset and dont want to see rate increases. And obviously, were painfully some of these are more painfully aware of these rates as the early retirees. As you pointed out, president breslin, the family rates for early retirees. But what i learned is if we didnt go forward with rates, because we have annual contracts, that there would be no Health Care Plans available in 2021. And i just want our members to understand that setting rates annually is a requirement and that there are various constraints we have to deal with and considerations that we have to make in Going Forward, and that our staff and actuaries worked very hard in negotiating these rates. And while some of us still think some of them are a little too high and whatever our opinions are, we actually are required to go through this process, and we are required to have, and the board of supervisors accept and confirm our rates so that everyone in the system can have health care given through the employer in 2021. And i just want us all to really understand that, that its not just a matter of our choice of sitting here and saying, you know, we think theyre too high, and were going to vote no. So i appreciate all of my colleagues on the board in supporting these rate increases. Theyve been hard theyve been negotiated very hardly . Toughly . Its been a difficult process, and we appreciate it, but i just want everybody to understand the perspective. Thank you. President breslin okay. Madam secretary, item number 6, please. Clerk yes. Item 6 is the review and approval of the United Health care preferred Provider Organization nonmedicare rates and premium contributions for active and early retiree members, plan year 2021. This presentation is done by mike clarke from aon. Mike clarke, aon. Next slide, where we will present the United Health care p. P. O. Plan nonmedicare rates and premium contributions for active and early retiree rates. Ill start with a brief process focusing on the u. H. C. Plan, the rates, the rate cards proposed for active and early retirees. And as with similar employees here today, there is appendix information that i will not review, but this information is listed here and contained in the document. Next slide. As we start the preface, we focus now on the selffunded column that represented the uhcppo city plan. Selffunding means the claim dollars that are based on services delivered to members are paid by the trust, along with plan administrative fees to manage the plans. This includes processing claims, providing call center for members and other aspects of what United Healthcare does to support the management of this selffunded plan of sfhss. I as the aon actuary, set the recommended plan rates for the uhsppo city plan using health plan trend assumptions and required fees as well as any administrative fees that may be included in the program. The rate policy of the Health Service board does apply to the uhcppo, and ill be discussing the inclusion of the stabilization policy in the adjustments from 2020 to 2021 in this plan today. Next slide. And we use the same steps that ive outlined earlier to determine the rate change factors that well be reviewing today. Next slide. Focusing on the city plan and city plan choice not available, the average overall increase for these plans before Rate Stabilization adjustment is 7. 5 . The plan does have a deficit position for Rate Stabilization, and as approved by the Health Service board earlier in this rates and benefits signi benefits cycle, there is a an element of rating for the Rate Stabilization cycle plan. This brings the increase to 9. 0 on an aggregated basis in the review of these plans, and well review that detail shortly. Here you see on the bottom two portions of this chart that we reviewed earlier the overall plan rates for the uhcppo city plan and city plan choice not available. The city plan does have the highest total cost rates for the active employees, and the city plan choice not available exists to support a lower framework for member contributions for those who do not have full access to every plan here on this page, and well discuss that shortly. Next slide. Just a reminder of the citycounty of San Francisco active employee primary contribution approaches, the 939383, and the 1009683. I alluded during the kaiser presentation to footnote two, and ire reinforced that here. Based on m. O. U. , the employer contribution dollar amounts are set to equal the employer contribution dollar amounts for the second highest cost plan, which is the blue shield access plus h. M. O. Plan that was just approved for 2021 rates. The exception is the employee only tier and the 1009683 contribution approach, where the member pays no contribution for any plan. Next slide. And you can see, on the lower left of this slide that weve referred to earlier, the uhcppo city Contribution Plan elements for the three city charter employer contributions. Next slide. So with that background, ill review our recommendations that ill be talking through staff recommends that the Health Service board approve this renewal presented in this document and the 2021 monthly rate cards presented in this material. The resulting aggregate overall rate increase for the combination of uhcppo city plan and city plan choice not available, including the stabilization adjustment that i spoke about earlier, is 9 , and i will talk about how thats distributed across city choice and city choice plan not available and active and early retiree employees during this presentation. The active rate cards are shown for the two most common employer contribution strategies. And again, i documented what i highlighted in the m. O. U. For ccsf employees. The contributions are set to the second highest plan. Next slide. Next slide, please. The recommended rate increases for the uhcppo are based on 2019 claim experience thats intended to 2021, as well as the previously approved uhc 2021 administrative fees from the march 20 h. S. B. Meeting, and these fees are also documented in the appendix to this material, as well as the previously approved changes and Rate Stabilization amortization applied to the rates between 2020 and 2021 approved at the february 20 h. S. B. Meeting. There are no rate plan changes for the 2021 plan year, and the rate cards include the following cost components. The projected 2021 medical and pharmacy cost plans, the 2021 fees for the Administrative Services only portion as well as the fees for the shared Savings Program that u. H. C. Has with sfhss. The buyup for Rate Stabilization and amort asedation. As well as the v. S. P. Basic vision plan premiums and the 3 Health Care Sustainability fund charge. Next slide. The overall plan experience for 2019 was similar to National Trend expectations with an approximate 5 increase as we reviewed earlier in this rates and benefits cycle. The plan claims forecast are based on 2019 claims intended to 2021, using annual trend factors of 5. 5 por medical and 6. 0 for prescription drugs. The amortization of the deficit results in a higher level of buyup in the rates. This adds 1. 6 to the overall rate increase, and now, were segmenting the overall rate increase into city choice plan and city choice plan not available. And it is [inaudible] for the uhcppo early retiree families by 2021 to the ratios for the blue shield plans. So you will see that final year of that adjustment that was approved to may 2018 when i present the rate cards today. For the active employees, the segment is an approximate 10 increase for the city plan rates, and for the city plan choice not available because the rating matches that for the blue shield access plus plan, the city plan choice not available increase for the aksia active employees is 3. 6 . Next slide. So ive spoken about city choice plan not available. Su just as a refresher for the board, this outlines the criteria for Rate Determination as approximately as the population distribution into regular city plan versus choice not available. Choice not available was created in 2019 to facilitate a lower level of member contribution for employees and retirees that live in a zip code where one of the following occurs either city plan is the only plan choice available, which is the case for the vast majority of city plan choice not available individuals, but then, there are also a few who may live in a zip code in california where city plan and Kaiser Permanente might be available but not blue shield access plus, or city plan and access plus might be available but not Kaiser Permanente. But again, of these three scenarios and these three dashes, city plan being the only choice available is the reason for qualification for city plan choice not available for the vast majority of these individuals. And youll see the distribution for active employees. Most of the city plan enrollees have full choice, but there are about 116 who do not, primarily in the hetch hetchy and moccasin employees. Next slide. And so the Rate Determination for city plan choice not available for active employees is the same rates including all card elements as the blue shield access plus plan, and for early retirees, the same premium rates, and for the city plan, which leads to lower retiree contributions relative to the city plan based on the application of the city charter employer contribution determination formulas. Next slide. So with that, well go into the rate cards. And again, just a reminder of the information that i presented earlier. Next slide. For city plan, the monthly rate and contribution change, 2021 versus 2020, is influenced by several factors, and again, you see top chart, monthly employee and retiree contributions, middle page, and total page. The total cost that i referred to for the employees of an approximate 10 increase, for the early retirees, we spread that 10 across all the tiers based on the final year of the three Year Adjustment for full families. However, this does not adjust the calculation of the retiree only monthly retiree contribution. Because of the actuarial difference, it absorbs that difference in the retiree premium only increase because the actuarial amount provides the increase of the retiree only rate portion minus the portion for active employees. But the rates do increase 18 for the retiree only column because of what i spoke about earlier. For the active employees, the monthly employer contribution amounts are the exact same what we reviewed earlier with access plus. So when you take a roughly 10 increase in total rates, less only a 3. 6 increase in employer contributions, because of the way that m. O. U. Works, it results in employee contribution increases that exceed 20 . Next slide. So this is the same information that i just presented, but for active employees. The 1009683 strategy, whereas the employee only pays no contribution. This is the rate cards done with the uhcppo city plan. You can see the various components, and then, again, the right side of the page and the middle of the page shows the city charter employee contribution elements that construct the city contributions for retirees. Next slide. And this is the 1009683 active employee version of the rate card. So that is the city plan information. The next slide starts the information on city plan choice not available where, again, these are individuals that do not have full plan choice across the entirety of the United Health care, blue shield, and Kaiser Health care plans. The active employee pricing mirrors that for the access plus. The monthly total cost rate mirrors that of the city plan, but the employer contributions are higher because the retiree contributions match those for the access plus plan, as well. Next page. And this is the 1009683 contribution. This is the 2021 rate plan for the 938383 early retiree employees, as well as active employees. And 1009683. Next page. So as we cascade to the recommendations page, staff recommends the Health Service board approve the uhcppo and city care not available approve the plan rate increase. The individual populations and tiers would have varying increases that would ultimately overall average to 9 , as well as the resulting 2021 monthly rate cards presented in this material. And as you move to the next slide, ill ask for a statement from a United Health care representative. Thank you, mike. Good afternoon, and thank you, Health Service commissioners. This is heather tear with United Health care plan. United health care has launched many initiatives to support clients in communities with the covid19 pandemic. In addition, we recently shared with sfhss that were going to be returning 10 of the monthly sfhsshso fees paid to help alleviate some of the financial pressures. As many of us know, many of our plans have members that are older or have Chronic Health care issues, so we continually work with our Health Care Providers and bestinmarket netwo bestinmarketnetwork pricing for our plans as well as Group Network plans for our city and county of San Francisco members. Thank you. Thank you. Im happy to answer any questions, president breslin. President breslin any questions from the Board Members . President breslin no questions from the Board Members . I will ask for a motion, then. Commissioner scott this is commissioner scott. I move the acceptance and staff recommendations contained in the presentation now on page 29 and ive forgotten the earlier page and the resulting rate cards that have been presented. President breslin do i have a second . Vice president follansbee this is commissioner follansbee. I second the motion. President breslin any other discussion . Commissioner zvanski commissioner breslin, im sorry. I was muted, but i do have a couple of questions, if i may. President breslin certainly. Go ahead. Commissioner zvanski ive noticed for some employees, the employee and family plus rate have been going down im sorry for the echo and im wondering why those rates or at least the outofpocket seems to be diminishing. I was curious about that, and i may have misunderstood something. I thought i saw somewhere there was a charge for a u. H. C. Dental h. M. O. , and im wondering what happened because i thought we had delta for employees. And the last thing, im still puzzled that after the stabilization is applied, we end up with a higher rate than 9 , because i thought the stabilization would help keep the proposed rate increase lower, and so i must have missed something, and i apologize, mike, but its, like, how do we get higher . So thank you for those. There is a dental offering through United Health care as an h. M. O. It is one of two dental h. M. O. S offered to active employees and early retirees. The dental h. M. O. Rates are not included in this presentation. Well be presenting those in two weeks, on june 11, but United Health care does offer a dental h. M. O. As a plan choice to go along with the delta dental p. P. O. And the delta dental care h. M. O. With regard to the rating, you asked about both the family adjustments for early retirees as well as the rate zabl Rate Stabilization. We were evaluating the rates hearing differences between the single tiers and the full family tiers between the United Health care plans and the other available Health Care Plans to early retirees and determined while there are not many early retirees in t taking the Family Health care plan spmp. We felt it was important to look for opportunities to help create a more consistent approach to rating for early retirees in the United Health care versus the other plans. And so thats created an environment thats allowed us to lower the rate for the early retirees, and the early retiree families. And for the Rate Stabilization, the Rate Stabilization policy does describe both for deficits and reserve surplus balances. It is meant to help stablize the impact of rating actions from one year to the next, where policy includes amortizing onethird of the Rate Stabilization balance over the course of a threeyear period, so onethird in each year. And then, with annual readjustments happening based on subsequent plan year experience. So for instance, i alluded to the february 2020 Health Service board presentation, where we evaluated the u. H. C. Plan experience for 2019 and adjusted the stabilization, in this case, stabilization deficit for the uhcppo plan, and unfortunately, that stabilization grew as a result of 2019 experience, so that resulted in a higher buyup adjustment rates in the plan for 2020. I hope that addresses each of your questions, but im happy to take further inquiries on your questions. Commissioner zvanski thank you. President breslin any other questions . If not, we have a motion on the floor. Yeah, and president breslin, could i jump in very quickly . The United Health care representative stated the a. S. O. Fee relief thats occurring, just to correct, it does not go to members, it becomes something that flows through the trust, so i just wanted to clarify that particular point. Very appreciative of United Health care for passing along that fee relief as the u. H. C. Representative described, but just to clarify, that will become a you know, something that flows through the trust. President breslin so as part of our trust. Sfhss, correct. President breslin so is it earmarked for anything . I cant speak to that. All i can speak to is just knowing that that will flow through to the trust. President breslin okay. I will have to defer to an sfhss representative potentially to speak to that, or perhaps that becomes a follow up. Commissioner scott this is commissioner scott. I would be interested in snowi knowing the amount of that fund coming back to the trust. As well, and i would ask to have a panel to report on that at the next meeting or as soon as its available. Yes, commissioner scott. We have a meeting in two weeks, so well be happy to report that to you then. President breslin okay. The motion on the floor it s t approve commissioner scott karen, we need to have Public Comment. I know weve been at this for so long. President breslin yeah. I just wanted to remind everyone there is a motion on the floor. Okay. So well have Public Comment. Clerk thank you, commissioners. Yes, were going to wait 30 seconds to allow for the catchup at home. People watching at home on sfgovtv are delayed by about 30 seconds, so were going to wait about 30 seconds, and then, well open up the phone lines. Clerk all right. We will begin Public Comment for this item. People on the conference line, please be reminded that you have to push onezero to be added to the queue. Moderator, will you please open up the phone line for the first caller. Operator you have zero questions remaining. Clerk president breslin, that concludes Public Comment. President breslin great, great. Okay. So we have a motion on the floor to approve United Health care nonmedicare rates and premium contributions. All those in favor, signify by saying aye. All those opposed . The ayes have it, and its unanimous. Thank you very much. No further business. I believe this meeting is adjourned. Commissioner scott thank you. I was going to move for adjournment. President breslin thank you
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