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Employers concerned over Kaiser Permanente rate hikes

July 25, 2013 12:00:00 AM PDT
Kaiser Permanente is the biggest health care provider in California. Some of Kaiser's biggest customers are complaining about the increase in premiums.

Kaiser Permanente may be starting to lose its reputation as a provider of high-quality care at affordable prices. Rates at large employers that offer the HMO plan are rising.

At the California Public Employees' Retirement System (CalPERS), the nation's third-largest health care buyer, for instance, monthly family coverage at Kaiser in 2007 was the most affordable insurance option for workers.

Three years later it costs more than the plan offered by Anthem Blue Cross. Next year, Kaiser will be the most expensive plan, surpassing even Blue Shield.

David Hudson is very happy with Kaiser, but rising prices might make even good consumers think twice if employers want a bigger contribution from paychecks.

"Like anything, you weigh price. You always think about that. So it's another thing to consider," said Hudson.

Eyewitness News tracked down the health care giant's former CEO, who was in charge during the price hikes as it lured big employers looking for bargains. But he says we have to buy his books for answers.

"I really recommend you read the books. They're really good. They're very clear. They explain all the issues," said former Kaiser CEO George Halvorson. "They explain the entire agenda."

A proposal at the Capitol would force Kaiser to reveal how they calculate rates and show what it's spending the premiums on. But the HMO thinks the plan is an attack on its unique business model.

In a statement, Kaiser spokesman Chris Stenrud said: "Kaiser Permanente is committed to resolving the employer concerns behind this bill. We share the goal of wanting to make health care more affordable."

Meanwhile, employers feel trapped. With 40 percent of the market in the state, Kaiser may not feel it needs to negotiate rates. And removing Kaiser from a benefits plan may not be realistic because it's popular with workers.

Thelma Parker-Baldwin has been enrolled for 50 years. "I love the care, the pharmacy, everything. Everyone knows me. I love the care," she said.


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