San Francisco city employees face possible hike in health plan costs

San Francisco is considering approving higher health care rates for more than 47,000 city employees and early retirees starting in July, but workers say they can’t afford to pay more during a pandemic and an economic recession.

Around two dozen employees and labor leaders spoke against the increases Thursday during a meeting of the San Francisco Health Service Board, saying frontline workers are under economic stress. A San Francisco General Hospital employee’s voice broke on the phone line talking about how her household has lost income, forcing her to pull her kids out of daycare and work 20 extra hours a week.

Supervisor Dean Preston, who sits on the Health Service Board, said that raising rates is “highly problematic, especially amidst this health crisis.”

Employees bear a fraction of the monthly costs of their health care plans — anywhere from zero to 17% — while the city pays the rest. They have an option of five plans with the cheapest monthly rate for a single person at $48 and the most expensive for someone with two or more dependents at $1,393.

Under proposed changes, nearly 62% of employees with Kaiser Permanente plans would pay 5.8% more. A smaller percentage of city employees on certain Blue Shield of California plans would see rates increase by 3.6% while other Blue Shield members would see rates rise by 6.3%. For a small fraction of workers with United Healthcare plans through the city, rates could hike 9%.

Employees said that in the midst of a pandemic, with economic stresses and an increased demand for health care, the city shouldn’t let insurance companies raise rates. Workers and union representatives said the city should protect city employees during this pandemic.

“It’s immoral in a public health crisis,” said Rudy Gonzalez, executive director of the San Francisco Labor Council representing 130 unions. “While we appreciate the designation as heroes, essential workers and disaster workers really need your support.”

The Health Service Board did not vote on the rate hikes but agreed to revisit the subject on May 28. The officials need to formalize the plan and send it to the Board of Supervisors for final approval by July.

Kaiser’s main justification for the increase was higher use of behavioral and mental health services from 2018 to 2019 which raised costs, an insurance consultant explained Thursday.

The proposed rates “represent our efforts to sustain and deliver high-quality health care for all our members over the long term, and reflect the expected costs of providing coverage for our members,” Kaiser spokesman Karl Sonkin said.

Blue Shield’s two main drivers for rate hikes are the rise in provider costs and increases in prescription drug costs, spokeswoman Erika Conner said.

“We are committed to ensuring all Californians have access to high-quality health care at an affordable price,” she said.

San Francisco Health Service System’s proposed hikes for its plans also reflectunderlying trend claims from 2018 to 2019, officials said. The agency’s director was not immediately available for further explanation.

The proposed rate increases are not drastically different than those of previous years, the insurance expert’s presentation Thursday reported. Kaiser raised rates 5.9% in last fiscal year’s plan. Blue Shield had lower increases of 2% last year.

Mallory Moench is a San Francisco Chronicle staff writer. Email: Twitter:@mallorymoench

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