With some of the highest premium rates among the 13 insurers that will sell plans on California's health insurance exchange, many industry analysts are questioning whether Kaiser Permanente intentionally priced its premiums so high to prevent expensive consumers from applying, the Los Angeles Times reported.
More than five million new consumers are expected to apply for coverage through California's exchange, and a large portion of that group likely will have pre-existing conditions or chronic illnesses that make them costly to insure. And about half of the new consumers will have low or moderately low incomes, making them eligible for federal premium subsidies.
"Kaiser has structured this so they don't get a lot of the poorer and potentially sicker people," Steve Valentine, president of healthcare consulting firm Camden Group, told the Times. "Some people have been unemployed and underemployed for years, and they may have a lot of healthcare needs. There could be a lot of pent-up demand, and Kaiser may be trying to dodge that bullet."
But Bill Wehrle, Kaiser's vice president of health insurance exchanges, said its high prices weren't intentional. "There is a lot of uncertainty about whether the healthy show up as well as the sick," he said. "We are very competitive on rates in some regions, which is a pretty strong indication we are not trying to avoid anything. There is no question we want to grow in the exchange, and I think we will."
Explaining its high rates, Wehrle pointed to Kaiser's rivals for offering low-cost plans by sacrificing a wider choice of providers and hospitals. Blue Shield of California, for example, submitted exchange plans that include only 36 percent of its overall physician network, FierceHealthFinance previously reported.
"We were surprised to see some of the rates," he said. "We were surprised at what looked like very narrow networks from our competitors. We don't cut off any slice of our network."
To learn more:
- read the Los Angeles Times article