Bob Hertzberg

Kaiser Forced to Repay Small Businesses for Overcharging

October 4, 2011 by Calitics

HMO faces scrutiny for their arithmetic

by Brian Leubitz

Kaiser is something of a mixed bag.  They get some good press for focusing on areas that help to reduce health care costs, preventative care, that sort of thing.  On the flip side, they are usually somewhere in the background on lobbying efforts, killing any attempts to make health care insurance more consumer friendly in California.

Well, today's news is more on the dark side.  It turns out that they've been overcharging small business customers and not really providing the data to back it up:

Kaiser Permanente has retroactively rolled back rate increases that went into effect for small businesses on July 1 by 1.2 percent.

The welcomed - albeit small - bit of news for thousands of  California enrollees comes after a bit of wrangling with the state regulators.

Kaiser in April had proposed a 10.7 percent rate hikes for the bulk of its small business customers. The state Department of Managed Health Care, armed with a new law that allows them to scrutinize actuarial data behind the rate filings, pushed back.

"We've been  concerned about the lack of data they provided to support their trends and we requested they reduce their rates," said department spokeswoman Lynne Randolph.

The new increase of 9.5 percent translates into a total savings of $13.5 million, Randolph said.