December Kaiser Insurance Renewals Report Large Rate Increases

The editor of is raising concerns about December Kaiser Insurance Renewals that have gone through the roof.

We examined two December Kaiser insurance renewals and discovered rate increases of 38.0% and 31.6%, respectively.  Yet, the Kaiser Permanente “recommended” renewal plan was not the best choice for the employer in each of these two cases.

Other 2015 Kaiser Permanente health plan renewals were quite reasonable.  Why this polarization of plan costs?

“We found grandfathered plans suffered less, while non-grandfathered plan renewals were battered by several factors.”

For example, many December renewals are the direct result of the so-called “grandmothering” strategy of delaying your normal plan anniversary date to the last month of the year.

December Kaiser Insurance Renewals Report Large Rate Increases

What is happening now in California is a combination of several factors…

  1. Expiration of .90 to .95 Risk Adjustment Factors (RAFs)
  2. Expiration of pre-ACA pricing methodology e.g. 10-year age brackets
  3. Introduction of ACA rating rules e.g. 1-year age brackets for adults
  4. Families with more than one child begin to pay extra for each child up to 3
  5. Separate premium charge based on actual spouse birthdate
  6. Mandated Pediatric Dental and Vision
  7. New taxes and surcharges to fund Covered California subsidies
  8. Replacement of “grandmothered plans” with metal tier plans

Small Group Insurance Rate Increases are infuriating San Francisco start-ups and small family employers throughout the bay area.

“We are dumbstruck how Kaiser has mismanaged the communication of these changes, by not better educating small employers of what was coming.”

Further, in many of these renewals, Kaiser has made the decision to map the old plan to a more expensive renewal plan, bypassing what seem to be better-valued health plan options for the employer. Basically, it’s an unsolicited plan upgrade, but right when a small business can afford it the least.

Fortunately, there are strategies to mitigate the high cost of Kaiser rate increases.

“Kaiser is available through many channels, including PEOs, public and private exchanges and, of course direct. If you understand changing markets and where to look, you can often find better value.”

For more information about finding alternative Kaiser health plans or to contact the editor of, click here.