Our Point of View
June 24 2008
Kaiser Permanente Colorado Joins With Colorado Governor and Commissioner of Insurance to Make Health Insurance More Widely Available
Kaiser Permanente's Colorado Region, working in conjunction with Colorado Commissioner of Insurance Marcy Morrison and Colorado Governor Bill Ritter, announced an agreement that will allow Kaiser Permanente Colorado to provide $155 million in financial relief over the next two years, as well as taking two other steps that will also benefit Colorado consumers.
Kaiser Permanente Colorado is in a unique position within the Kaiser Permanente system. The Colorado region's rate position and capital expenditure plan enabled the region to enter into this agreement with the Colorado Department of Insurance to offer these premium credits. In 2009 and 2010, Kaiser Permanente Colorado is not expecting to have capital needs that would go beyond the reserve the region already maintains.
In other Kaiser Permanente regions, such as California, Hawaii and Oregon, new hospitals and medical office buildings have been approved and are at various stages of the planning or construction process. These capital-intensive projects require major reserves to ensure completion.
The Colorado economic relief program will be in the form of premium credits or enhanced benefits to employers and individual customers of Kaiser Permanente Colorado in 2009 and 2010. Kaiser Permanente Colorado has also agreed that a portion of this relief will be dedicated to the expansion of its Medical Financial Assistance Fund by $5 million during the same period to support the health care needs of lower income Kaiser Permanente members in Colorado.
The $155 million in financial relief will be applied to individual and employer consumers who purchase health care coverage from the Kaiser Foundation Health Plan of Colorado. The relief will amount to $77.5 million per year in both 2009 and 2010. This $155 million will be distributed in the following ways:
- A one-time average credit of $287 will be applied for each individual subscriber of Kaiser Permanente Individual and Family Plans in both 2009 and 2010.
- Employers will receive a one-time average credit of $287 for each enrolled subscriber in both 2009 and 2010. Employers will have the option to retain the premium credit themselves, pass it along to their employees, or enhance benefits.
- Kaiser Permanente's Medical Financial Assistance Program will be expanded by an additional $2.5 million per year in 2009 and 2010 to provide co-pay or cost-sharing assistance, based on financial need.
Kaiser Permanente Colorado will also continue its expansion bringing its integrated health care delivery system to more Colorado communities. "In the past four years, Kaiser Permanente Colorado has built three new medical office buildings and expanded the number of hospitals available to serve Kaiser Permanente members," stated Donna Lynne, regional president of Kaiser Foundation Health Plan of Colorado. "In January 2009, Kaiser Permanente Colorado will expand its services into Southern Colorado, and by the end of 2009, it will add two new medical office buildings as well as several more by 2012," she added.
Kaiser Permanente Colorado maintains a financial reserve level that is adequate and in alignment with industry averages. Kaiser Permanente Colorado's reserve equates to three months cash, which is modest compared to the reserves of most health insurance companies. Kaiser Permanente is a unique organization – unlike our competitors, we are both a health care and a health benefit provider. As a nonprofit integrated health care delivery system, Kaiser Permanente needs to invest in medical offices, technology, programs, and services. We also save this reserve for the future needs of the organization, such as the geographic expansion being announced to provide affordable health care to as many Coloradans as possible.
In addition to the above steps, Kaiser Permanente Colorado will maintain appropriate reserves by increasing investments held in its own accounts and reducing the balance held by its California affiliate.
The following is a statement from Kaiser Foundation Health Plan of Colorado Regional President Donna Lynne about the announcement today:
"Kaiser Permanente has been providing health care and community benefit services to Colorado communities for 40 years. An important distinction is that Kaiser Permanente is a complete health care delivery system. What does this mean? It means we provide the care as well as offer the health benefit coverage.
"Kaiser Permanente Colorado maintains an expansive medical office based model and a network of community based health providers that care for nearly 485,000 Coloradoans. We own and operate 17 medical office buildings, complete with pharmacies, labs and radiology facilities. In addition, we employ teams of clinicians to support the care delivery and administrative staff to efficiently manage our member's benefits. Our system of care is unparalleled in Colorado.
"As part of our commitment to providing care for our members, we have made, and will continue to make, significant investments in our delivery system in order to provide quality health care. This includes building even more medical offices, employing of clinicians and providing state of the art equipment and technology for our patients.
"Kaiser Permanente Colorado has a history of partnering and collaborating on different initiatives to increase access and affordability to health care. Our values and mission demands us to create partnership to improve our communities. This collaboration includes working closely with the administration and commissioner to identify and support actions. For example, in December, I shared the podium with Governor Ritter to announce Kaiser Permanente's $16 million commitment to fund LiveWell Colorado. This is a program to support community health.
"Today, Kaiser Permanente Colorado is here as a result of conversations with the governor and the DOI. In the short term, we are providing financial relief in the form of premium credits to make insurance more affordable and to reward our customers. We are also announcing today an expansion of our health care services into Southern Colorado.
"If there's one thing people take away from today's announcement, I hope you know this: Kaiser Permanente is driven by a mission to provide affordable access to high-quality care. As a result, we take the investments our members and employers make in us very seriously. Today, along with the Governor and the DOI, we announced a plan to extend this mission one step further by expanding our services and bringing financial relief to consumers."