Profits of $5.7 billion since the beginning of the year 2009 are a big question especially since they are a non profit organization. As a non profit they are not supposed to be making big profits as such and direct money back into the company or give others bigger donations perhaps. Anyway, according to this article it didn’t take a ton of convincing before Kaiser decided to roll back the premium increases.
We are seeing more and more of this and it’s time to look at those algorithms of business intelligence that are calculating the premium increases I think of all the insurers since they are seeing massive profits all over the place. Just last month their nurses were involved in a statewide strike at various facilities and in Los Angeles they stated a one day strike at the Sunset Boulevard facility, so again with profits of that size I don’t think the nurses will be turning a big open ear to any concessions right now and their strike was basically about working conditions.
Thousands of Nurses To Strike on Thursday In California to Include Sutter, Kaiser Permanente, Berkeley Hospitals and More
The article also stated the rate filing was long and involved to review as they do not file financial data in the same formats as other insurers and being both a healthcare organization and insurer I can understand their processes and numbers being a bit more complicated but they still need to be presented. They had unions disputing the recent double digit premium increases as well. Kaiser pays no taxes and is the most profitable HMO in California. Granted they have done a lot of things right with care and medical records but I am guessing that also affords the company some lobbying strength too. BD
Emeryville, CA - Kaiser Permanente recently announced that it will roll back $30 million in premium increases it imposed this summer on hundreds of thousands of Californians, in order to avoid further examination of its rates by the California Department of Managed Health Care (DMHC).
The $30 million rate rollback will affect more than 300,000 Californians employed by small businesses and nonprofit organizations whose monthly rates were boosted by an average 10.7% on July 1, 2011. Kaiser has reduced rates for these consumers by 1.2% across the board going forward, and will refund that portion of the premiums it has collected since July.
The letters cited Kaiser’s failure to disclose information about its massive profits ($5.7 billion since the beginning of 2009) and executive compensation practices as well as its failure to provide historical data on prior rate hikes. Furthermore, the letters noted that Kaiser sought rate hikes that were more than triple the rate of medical cost inflation.
“Despite this enormous profitability, Kaiser currently seeks a 10% hike in the monthly premiums for health care from Los Angeles Unified School District employees. As you can imagine, this proposed premium hike – which would drain an additional $40 million a year – could not come at a worse time. In the midst of the Great Recession, our city’s school district has laid off 1,400 teachers and other staff and has forced our children to endure ballooning class sizes that deprive them of the education they deserve.
In fact, last month Kaiser reported that it earned $1.6 billion in profits during the first six months of 2011 – a 45% increase compared to the same period in 2010. In this context, it’s difficult to understand how Kaiser, which we understand is a nonprofit, can rationalize the boosting of its rates on consumers…”