some commentary on the specific rate actions that i discussed on page 1, for the blue shield plans, to .3% increase, 0.9% for kaiser. they were higher increases in 2019, approximately 90% overall. what we are finding that is especially with the plan, now that we have one full year of actual experience, that the plan is doing well. and so our increases are substantially lower than just general trust -- trend cost expectations for good news on the blue shield plans. for kaiser, we do want to remind everybody that we have a 0.3% rate decrease for 2019, and that followed two years of approximately 5% increases for 2017 and 2018, so the underlying 5.9% rate increase which is really 4.9% on actual cost

because the extra 1% is due to a federal tax that is outside of kaiser permanente's control. it does meet national trend expectations. and then with the u.h.c. p.p.o., the underlying increase from the experience matches national trend expectations, and then as we will talk more and more about in that presentation, we had some rate stabilization reserves that we applied 22019 rates that were not available for 2020. there's a slight deficit in rate stabilization now, so 5% of this increase is the rate stabilization change year-over-year, 5% is underlying experience. saw the next page, we have a

look at the planned distributions. like i showed earlier, this gives everybody an indication of how active employees elect by plan, where the percentage is for each individual column. for instance, 22.8% of access plus active employees or access plus represents 22.8% of all active enrolled employees. you can see distribution, early retiree distribution, just to give you a framework for when we talk about the plans how the population distributes across each of the four plans. page 4, again, is the summary chart, now for this purpose, it is illustrative, showing to the nearest dollar. actual rates we will ask -- ask you to approve during the rest of the presentations, but just

for illustrative purposes, you can see how each of the health plans' rates are projected to play out on a monthly basis. so three sets of columns, so the active employees who fall under the 93-93, 83 contributions strategy, active -- active employees who fall into the 19683 strategy, so we typically show both of those in our presentations, and then the early retirees or the full employer contribution are also shown. i have some shading that helps you see the association of plans , and especially for, you know, labelled here see the cna, city plan choice not available. that was designed last year to help those individuals who live in a location where they don't

have a choice of plans to result in a lower paying contribution for those members, and so you can see where the associations are in the shading of city plan choice not available to other plans. and then i will also direct you to the second footnote that is effective january 1st, 2020. they will be a super -- suit -- a service fee of 2.2% of the value of a minimum of $2.49 to be charged on credit card transactions that pay for member health plan contributions, but there is no service charge for each x. and my final page talks about plan design changes that we will be talking through four united healthcare p.t.o. we received feedback, as we did the bench working presentation back in march about the fact

that the network family out-of-pocket maximum relative to single is much higher versus the other plans. so we have a recommendation to lower the out-of-pocket maximum today to twice the single amount so that ratio holds today for blue shield and kaiser permanente plans. we are proposing that for united healthcare. we will talk about that in that presentation for blue shield. expand access for certain vaccinations to selected retail pharmacies, as well a similar to what was done last year for united healthcare plans, offer up to 40 personal counciling visits per member annually without a specific diagnosis. today they are generally available to those with diabetic diagnosis only. and then with kaiser, it is a required change, implementing a change in the infertility benefit coverage and we will specify that in detail when we

have a kaiser presentation. and then finally, coming back to the conversation we had with you in april around prescription drug retearing. we talked about this as a possibility that we would perhaps evaluate for the 2020 plan year in the united healthcare and blue shield. we are not recommending those changes today, so a lot of work has transpired in the last four weeks since our last health service board meeting. granted, it would generate cost savings for the plan, but there was substantial concern as we really dug into the numbers, and i will specifically credit william from the san francisco health services system. he was instrumental in doing very deep analysis almost drug by drug analysis, and we feel, as a result of that evaluation, there would be concerned about possible tearing changes on

member medications and the impact. so we do believe that more education on prescription drug alternatives is needed. there is immense change, as noted by a doctor on one topic. the awareness of the cost of medications and advertisement. so that any medications and those high-cost ones we focused on in april, are prescribed less , in favour of alternative and effective medications in the same treatment classes. >> i just have a comment about page 4, monthly rates. when you look at blue shield retiree plus two, you know, they are higher then the city plan by $700 or something on each tier, which amazes me because when i

see how expensive the city plan is, but blue shield appears to be more expensive then the city plan. when you get down to then -- when you get down to the member contribution, it is more for the city plan, even though the total cost is less, so how does that work? >> there is a historical basis for how total cost rates have been set, established long before i personally became involved with the san francisco health services system. as a refresher, one of the things that we are working towards with 2020 being year two of the three-year transition, is to migrate city plan total cost rate relationships between the single tier coverage and the family tears for early retirees to be consistent with the relationships that are in place

today with blue shield and kaiser. with respect to the employer contribution, the city charter defines the elements of the formula that we utilized to calculate the employer contributions, and then by definition, subtracting those from the total planned rates to generate member contributions, and the employer contributions are the same for those in retiree plus one dependent, and retiree plus two or more dependence. essentially the number is the full increment of contributions for the second and higher dependence. >> in the city plan? >> actually, that phenomenon is all plans. for instance, in the middle of this chart on page 4, the employer contribution, if you

look at the right two columns in the middle of that chart, is an example you will see 1,716 in both the retiree plus one and retiree plus two more dependent columns. you will see the same phenomenon with the same numbers in each of those two last columns. >> it appears that blue shield is every bit as expensive or costly as the city plan, and yet we keep saying how costly the city plan is. >> thank you for that acknowledgement. we certainly recognized it last year and thank the board for approving the action that is now having his as migrate over a three-year period, the reading relationships between the family levels for city plan for early retirees, and the single tier for retirees.

>> thank you. all right. any comments on this item? seeing none, we will move to item number 13, please. >> item 13, review and approve blue shield in california flex contributions presented by mike clark from aon. >> mike clark. you will see on the content page we presented a renewal summary, we recommended design changes for 2020, and the resulting rate cards, and ultimately asked for your action on a recommendation. you also see in the appendix for reference, there are footnotes to help define terms in the rate cards, glossary of terms, and then to the extent it helps to view the 2019 current year for

trio. so today i will present recommendations that include, first of all, approving a renewal proposal of what will be a combined rate increase across the two plans, very specifically to .3% for access plus, and 0.9% for trio. as well as the resulting rate cards that include two recommended plan design enhancements. so the first is based on a blue shield recommendation, which we thank them for bringing to us during the renewal process. the expansion of the availability of certain vaccinations and retail pharmacies, i will describe in detail what those are, and this is expected to deliver about 125,000 annual savings, and then also to be consistent with the united healthcare plan and introduce availability of up to four counciling visits per

member. we expect this to have some nominal aggregate financial impact. certainly additional service cost from the counciling business themselves, within then we would expect some modest reaction that result from members utilizing what they gain through the nutritional counciling visits. >> i'm not sure this is the right time to ask the question, but the expansion of available vaccinations at other institutions, does that -- is that because the providers, there is a provider charge for the flu vaccine and their offices, and so you are now limiting that information, and i guess the question is, how did these outside organizations

integrate that message into the health record of our members so that we can look to see how our members are doing with regard to the vaccinations that are listed pneumococcal vaccine, flu vaccine, et cetera. is that built into the hundred $25,000 savings, is a transparent interaction, or is there some loss of interaction? >> i can speak to the savings assumption, and then a representative from blue shield has additional information to share, i would welcome that individual to come forward. the savings is estimated based on a savings in terms of the cost of delivering the vaccine, and an alternative site of care, and also some presumption that a member who may not have obtained a vaccine, but if you are making it more readily accessible,

perhaps through a retail pharmacy, that could have some nominal impact and avoidance of certain conditions that could lead to additional costs. i will remind that 125,0004 this is a baseline of about $300 million in this plan, so that is a relatively nominal figure. >> this doesn't illuminate someone going to their dr. and getting a shot. >> no, this is simply expanding the accessibility but does not change any current approach for someone obtaining a vaccine. i will share that specific table of the specific vaccine shortly. page 3, just to remind that, these rate cards in the presentation are shown for two

common strategies, but there are multiple employer contribution strategies for active employees across the entire system. so please note that the total rates apply in all situations and we are simply showing two of the most common employer contribution strategies for the city and county of san francisco >> paul brown, blue shield. good question. i don't know the answer 100%. i don't believe that a vaccine filled at a pharmacy would be integrated into the emr. it is a function of convenience, somebody going to fill a prescription, obviously the prescription emanating from the emr would be upgraded, but if they got to the pharmacy and elected to have a vaccine, that would not backfill into the e.i.r. unfortunately.

>> this is a comment for all of our health plan partners. as we look at contracts and services and benefits, i think we should be looking to preventive services. we're looking at that for others if there is some gap, i would hope all the health plans would work to try to maximize the honesty and accuracy of the data that we will be asking for as a health services system. >> yes. we as the health system would have the record, it just would not be backfilled. thank you. >> okay. , a couple of clarifying notes on page 5 that i'll go through quickly. i talked about our recommended increases on the status quo basis. these do include all components

of the rate cards including the previously approved rate stabilization amortization of $1,896,000. the two elements of rate cards no longer apply. the california organization tax that was built in is required cost for blue shield and is set to expire june 30th, 2019. so that fee today is give or take about $2.70 per employee per month that would go away, and based on the prior approval, best doctors is no longer included in the rate cards, and for trio, just noting that the maximum exposure is capped at a lower level than access plus for blue shield. responsibility claims is there is more than 115% of projected claims versus 125%, and this

provides avid risk protection and we also have a map to increase of eight-point 5% for 2020. thankfully we don't need to consider that with a much lower calculated increase. the rate increase renewal, overall, we thought you would like to see on the last bullet on page 7 that we still see much lower dependent per employee and early retiree ratios and trios a versus access plus. it tends to have more dependence per employer or retiree covered. from a. fee perspective, the fixed costs that roll into the renewal for blue shield, the good news is total fixed fee increase, 1.3%. and you can see the elements of those three items on page 8.

so the expanding vaccination access a retail pharmacies, pag. the select flu vaccine presently available to benefit of zero% preventive cost share. this is to expand that accessibility of certain vaccines. no prescription would be required for coverage of the vaccines. i'm about to walk you through, and they are covered in accordance with guidelines. so the list, page 10, shows all of the different elements of the vaccinations that would be covered at retail pharmacies, including influenza, which is currently available, along with

the applicable age limits for those particular vaccines. >> can i ask one question that just occurred to me. since there's no prescription available, and hpv, for example, is for nine years or older, how do pharmacies handle a 10 -year-old coming into the pharmacy, saying, i've heard about hpv, my mother doesn't want me to get that because she is opposed to vaccines, but i wanted. do the pharmacies have informed consent for minors? how do they handle this? >> especially access plus, you have lots of dependence. some who i am assuming are under the age of 21. >> we will research that and report back next month. >> again, since there is no co-pay, and it won't appear on

the minor's record, that i can see where a young woman or a young man, since this is licensed for both, might choose that option to go to a pharmacy and say, i don't want it in my record, so this is what i want. >> do they have their own i.d. since they are minors, or would they be -- >> i think we can only speculate at this point. >> and then the second change, we have outlined here, the recommendation to expand the counciling availability. we expect only a modest, perhaps negligible financial impact. the cost of services, but also some living potential. >> i'm sorry to keep asking these stupid questions.

since some of these vaccines are one time or two shot things, some of us, including myself, can't remember when i got, and exactly what i got. if i walk into walgreens as a blue shield member and say, i think i need a vaccine for shingles, how does the pharmacy screen to know that i actually am due for it, or can get it, were not excluded, or i didn't already have it? is there feedback? maybe you should research that, too. >> i can tell you anecdotally that there is a questionnaire that you fill out similar to what you do when you are getting a flu shot. there is screening criteria. >> is one of the shortcomings of questionnaires. >> exactly.

>> on page 13, we introduced the rate cards with the two plan design change recommendations built in, although admittedly both on a very negligible basis on impact, and so i obviously won't read through all of the details of the rate cards, but to acclimate to you, pages 14 and 15 are the change in total cost of the employer and the member contributions here over a year. the member of the top of page 14 , the employer contribution change in the middle of page 14, and the monthly total cost rate. they wanted to get a view of bottom line of how things are changing, and then page 14 is for the early retirees and the

9393 group. page 15 are early retirees which are the same, and the 19683 group, the actual rate cards follow on 16 and 17, and then you have the same sequence of four pages for trio from pages 18 to 21. recognizing there are a lot of numbers on those eight pages. are there any questions about anything contained on pages 14 through 21? >> no questions? >> no. >> with that, i bring you to slide 23. i will read the entirety of this for our recommendation. first that the blue shield of california plan renewal proposal for combined rate increase of 1.9% which flips for access plus , 0.9% for trio.

we asked for that approval. we asked for the approval of the resulting rate cards and that includes our twaddle recommended plan design enhancements expanding availability of the vaccinations listed earlier in the document a retail pharmacies >> all right. i need a motion. >> i move we approve the contributions for plan year 2020 , including two additional enhancements as recommended. >> a second. >> great, public comment on this item?

come forward. >> hi there. my name is erica. i am a city employee and blue shield is my provider. last month i spoke about concerns that i had with --, i don't know how to turn this on. sorry, last month i spoke about the terms i have with drug coverage. how many other drugs fall into the category you're paying 100% out of pocket, 40% less than using insurance. one, 50, people citing cancer having to deal with this, is it only fertility drugs, so disproportionately impacts women i don't know the answer, i'm hoping that this body asked those questions and received answers -- receives answers before you take any vote. the second issue i want to speak about is arguably more

concerning. it has come to my attention that my ability to access insurance seems to be dependent on my partnership status. i will give you an example. if you're a heterosexual couple and go to the dr. and you are 35 years or older and you tell them you want to start a family, you have been trying for six months, you are covered. no other questions asked. you are not asked if you are trying to conceive when a woman is all relating, you are covered if you are a lesbian couple, single by choice or uncoupled and you want to start a family, you will receive denial letters such as this one. the only other way that you can get covered is if you have a demonstrated condition recognized as the cause for him to -- infertility. let me tell you what doesn't count. age, i am not a doctor. i am 41. it doesn't take an md to know it is harder for me to get

different. low ovarian reserve. despite the fact that i am comfortable of stimulating drugs , i will produce very little, one, maybe two if i am lucky. family history of early onset and onset of menopause. how many other conditions fall into this category? i have had four failed iui treatments and i am on round three of ivf, yeah, i have to fight for the insurance. i'm not here today to talk about me. this discriminatory practice of insurance providers is not unique to san francisco, but what is unique is this is san francisco. a place that prides itself, that defines itself on equality. what is unique is that this isn't a small company.

you are determining that health benefits of 30,000 people and my guess, at a cost of a few hundred million dollars. what is unique is that you are spending taxpayer money, that there is a commission whose sworn responsibility is to ensure that fair and equal access to all its members. you can demands that all employees have equal access to benefits and not approve the contract. do you feel comfortable voting on a plan who has a policy that is questionable and arguably discriminatory and that the department has yet to provide clear evidence this is not the case. thank you. >> i will call your attention that prior to when i was reviewing the director's report, first of all, thank you for coming forward once again and bringing your experience to

light for others. i much appreciate it. we have begun an in-depth review of our facility benefit. this is noted on page 2 of my report, of which the question, this benefit was put into place just several years ago, and we are working with the plans now to get a better understanding of who is accessing the benefit and what the experience is. erica's situation, i cannot respond to in particular, as you are well aware, but we have worked in partnership with blue shield and the medical group to address the concerns and the specialty drug issue that was raised at the last board meeting that is now on the list as well. we recognize the increased complexity in navigating the system, including the infertility and assisted projection technology of which there is a grey line.

we will address -- we are trying to stay on top of changes in the market. we have reached out to -- mike, remind me, the a.m. consultant helped us with the development of the fertility benefit several years ago, and she has commented that this is an area, this grey area between assisted reproduction and technology and infertility and it has surfaced many places, and there are ways that we can address that, and so in order to do that, we are searching -- researching all these implications that would come with removing the requirement of a diagnostic and assisted infertility, including tax implications. these are the taste of things that are considered when the surrogate and adoption benefit were considered.

and the data analysis that we are looking at is on the way to discern the utilization and mitigate any abuse and ensure equal access and address perceived barriers of all kinds of families, regardless of sexual orientation or partners. we remain committed to inclusivity as a guiding principle ingrained in our strategic plan, and we will take the steps to do so. i don't know if i mentioned it here, but when i attended the conference board in march, myself and our account manager from blue shield found ourselves sitting next to each other at a presentation done by salesforce, which actually helps orchestrate the benefits for their members, because there are so many --

there's so many decision points in the process that a member could be better supported perhaps if we had a service like that. i appreciate erica bringing this forward. i have commented to her and our team that we are near ready for presentation, and maybe able to bring it forward next month, a more in-depth policy analysis of where we are at. we are working diligently to ensure that our members are getting the care they require. >> can i add that i think, you know, in support of the concerns , that we are aware there is now and an enhanced alliance between ucsf and catholic healthcare west, which includes st. mary's hospital, and when we reviewed the trio

plan, i read the bishop's statement on morality for all the healthcare providers, staff, employees, physicians, et cetera , and these enhanced alliances raises more questions again about this issue of we were assured that there was not an issue in san francisco, or these issues between providers in trio, but i think that -- i don't know quite what it is or what it means, but my only -- it may exacerbate problems that are already existing. is changing the marketplace. we'd to keep on top of this and ahead of this, and not wait until members have, you know, a complaint, frankly. i appreciate bringing this complaint and concern to us because we need to know what is happening in the real world.

>> i guess i have a basic factual question about whether blue shield is, in fact, treating heterosexual couples and infertility treatment different than single women or lesbian women her seeking fertility treatment. >> blue shield, this will be added to the list of follow-up questions. i do not know the answer, but i made a bunch of notes following your comments. the one that i underlined a couple of times is equal access. i can assure you that there should be no benefit in our benefit plan, the way we administer it that should discriminate, in any form or fashion based on sexual orientation, gender or otherwise , so i'm very

interested to more about this. i wasn't at last month's meeting , and i will take it upon myself to follow up, and again, i can assure you, there should not be anything, in any part of our benefit administration that restricts access based on gender or the like. we will definitely look into that. >> it is good to hear you say that. this is concerning to me and to the board of supervisors. if it is happening in san francisco, it is not good. >> definitely not good. i would be surprised if we did, but i don't challenge your words , but i definitely need to learn more about this. >> definitely. >> i will say that i would not be surprised if there are issues

around fair access, and i think this is only enhanced by another recent pronouncement of federal administration that allows religious beliefs to override provider responsibilities in individual settings. so it tries to allow people's religion to take precedence over medical care. i appreciate your looking into this, and understanding how this could be dealt with, or is dealt with, and if there are examples. >> i should briefly comment on the article about the alliance between dignity. i read that as well. we are not part of that, obviously it is just between the providers. everything i have read is mostly about access. ucsf is at in overcapacity, and

my interpretation was it is a means to increase access to facility care more so than anything else, but that's what i got from the article. >> you can understand our concern, because there are civility -- facility dictums about certain kinds of care. we were assured there would be unobstructed, or unimpeded access to that care. for example, a woman who was delivering her second or third child and wanted a tubal ligation, now i don't think they would be admitted to st. mary's because they don't have ups dr. services, we can understand there maybe other procedures. so if it is about access to institutional care and the receiving institution has prohibitions, it is a little hard for me to be comfortable with these kinds of agreements. >> i -- i agree with you. >> thank you.

is this an issue with kaiser, also? >> no, not that i have been made aware. i do want to caution the board members about adjudicating a particular case in this instance , and so we haven't been made aware of other cases. we have asked all plans, and i would reiterate that publicly, to provide us with the data and that utilization of the fertility benefit through their plans. we have not yet received that back from any of our plans. we are really looking forward to that because we would like to then consider what inappropriate and sensitive way would be to actually talk with our members who have had those experiences, and to understand firsthand what those experiences have been. i don't imagine that we have large numbers, but -- and i'm basing that solely on the fact that i know that our live birth

delivery rate is less than 200 year for the whole system. i don't imagine that we have an unmanageable number of people using the fertility benefit that we could actually talk to and understand what their experience is. i know they would appreciate to get that kind of feedback as well. regarding the question, i did seek from dignity, i have received there notice letter to the regions that i will forward to the board. it does adjust some of the issues that you have raised. >> is there any other comments by the board board or any public comment? all right. there is a motion on the board to approve the recommendation of the actuary. all those in favour? opposed? it is unanimous. okay.

we are on to item number 14, please. >> item 14, review and approve the united healthcare preferred provider organization city plan, nonmedicare rates and premier contributions for the presentation by the clark. >> if you look at the content pages, the format will follow similarly to what we just reviewed for blue shield, and again, noting the appendix information to the extent that that aids you in reviewing the recommendations. today on page 2, our staff recommendation is that the health service board approve the renewal proposal as we presented here, any associated rate cards, and one recommended plan design enhancement, and again this came out of conversation that was had at the march board meeting. we are recommending the

reduction of the family, and a pocket maximum to two times individual limit overview. we will review that in detail in a bit. as i mentioned earlier, the overall resulting planning increase for 2020 is 7%, and page 3, like in the entire presentation, these rate cards or for two of the more common strategies for employer contributions by the city and county of san francisco. on page 5, these recommended rate increases for t.p.o. are based on 2018 claim experience that we trend to 2020 using a national trend factor. it was previously approved administrative fees from the march meeting that, are contained in the appendix to this document, and the previously approved changes in rate stabilization amortization that were also approved in the march meeting. and there is a small impact to the design change that i have

concluded -- included as well. in particular, just a refresh on the rate safely you will see that in my third bullet points. we have $1,661,000 of fly down impact embedded into the 2019 rates. now we have 117,000 embedded into the 2020 rates. and rounded numbers, a at $1.8 million increase impact of the total cost on top of just normal underwriting. and then expert opinion fees no longer apply in the rate cards. on page 6, very important to stress that the plan is running as we would have expected, approximately a 5% increase on a per employee, per retiree per month basis in the claim experience in 2017 and 2018, which is pretty consistent with

the national trends, active employees ran a little bit more favourable, early retirees, less favourable, and on the whole, approximately 5%. then we used factors in our forecasting a five-point eight% for medical, six-point 4% per prescription -- prescription drugs. i talked earlier about the rate stabilization difference. they will talk about only a zero-point 1% impact to the rate increase, so fairly small. we will talk about on page 10, and so that all adds up to approximately 10% increase when incorporating all of these elements. and then i spoke about it earlier, but i want to emphasize the last bullet on page 7. last year, in may, the health service board approved a three year migration of the family rate ratios to aid and help lower the member contributions

required for retirees in the plan, taking retiree plus one or retiree plus two or more coverage, and so 2020 will be year two of that three year application of that change. so when we look at rate cards in a bit, you will see favourable changes in the member contributions for early retirees in those family levels. page 8, just a refresher on city planning choices not available. if you recall, it is where members are in a zip code, they live in a zip code were either city plan is the only plan choice, city plan and kaiser permanente are available, but not blue shield, or city plan and blue shield are available, but not kaiser. and almost all circumstances, it is the first dash, city plan is

the only plan they have. and the way we determine the rate to produce the favourability and member contributions for active employees. we link the premium rates to the blue shield access plus plan. for early retirees, we link the premium rates to the city plan. you will see that that produces the same number of contributions for the single tier or early retirees as for access plus. that is wait -- the way the city charter employer contribution formulas work. it provides contribution relief for active employees in those areas, and early retirees live outside of the bay area and certain other outside of california geographies. page 10 specifics on lowering the family and network out of tax maximum recommendation.

currently that is $12,700 compared to a single tier in the out-of-pocket maximum of this plan of 3750. it is a large, large increase in out-of-pocket maximum one somebody asks dependents to the plan. and so we are proposing lowering that 12,700 figure 27,500. the other plans for the out-of-pocket maximums have singled and we believe this plan should too. we estimate it is a fairly nominal additional cost impact to implement this change. so then on slide 12 we moved to presenting the rate cards. again, two sets. the active employee 9383 employer contribution and 19683.

there is a step for the city plan and a set for city plan choice not available. they presume adoption. the extra 0.1% attributable to the family and network out-of-pocket maximum change. on page 13 you will see for the city plan, the rate and contribution change illustration from 2019 to 2020, that results from the calculations that go behind the rate cards. so on the active employees, you do see increases in the monthly employee contributions of about $90 a month for single tier coverage, up to $256 for family coverage under the 939383 strategy.

again, keep in mind that the employer contributions for this plan, for active employees, are based on the exact same amounts of employer contributions or access plus, based on the anchor of the employer contribution for this plan that is anchored to the same employer contribution for the second highest cost plan offered by us, which happens to be blue shield, access plus. and so if you recall, access plus had a 2.3% increase in total rate. this plan including the rate stabilization adjustment. there is a 10% increase in total rate, therefore that creates leverage and the resulting increase in the employer contribution for city plan. for the early retiree, it also

creates some impact on the retiree only tear, but i spoke about the second year of the three-year transition of the cost ratio that we are using to produce the family tier rates, and you can see that results in reductions in retiree contributions for city plan for both the retiree plus one and the retiree plus two or more. so page 13 shows those changes. page 14, for the hundred 9683 active employees strategy, same exact numbers as we looked on page 14 for early retirees. and then that leads to the return -- the rate card on 15 and 16.

and then starting on page 17 are the city plan choice not available rating illustrations. again, for the active employees, the total cost rates follow access plus, and so that's where you see the 2.3% increase on the total cost rates. the employer contributions are the same as city plan, so that also results in an increase for active employees. early retirees, again, you see reductions in the retiree contributions across the board for city plan choice not available. rate cards for city plan choice not available follow on slides 19 and 20.

are there any questions before i bring you to our recommendation page? >> what is it can -- how does a contingency reserve fit into all of this. we have stabilization, if we use contingency reserves and a lot of other situations. >> so we don't suggest using contingency reserves and rating because those exist to christian impacts of a wildly different actual experience in the plan relative to what we would forecast. in each of the last two years, what has generated the member contribution increases to be as high as they are is claim experience. we have actually seen apps that are slightly below trained -- trend for the last two years. it is almost the final unwinding

of the very large rate stabilization balances that have built up the last five to six years. for instance, next year i would expect that if we have another year where plan experience meets expectations, we will not have that sort of rate stabilization adjustment in the rating that we have had each of the past several years. >> does that mean you lose contingency reserve? >> we would only use the contingency reserve if there were very, very significant fluctuations in actual experience relative to the forecast. >> oh. that's what happens when all the medicare retirees are removed from the plan. all right. >> the contingency would be to take claim. it wouldn't be applied to rates for two years. we have a plan where all the

year as all of a sudden we just have a huge influx of bills. >> correct. it would be used to pay claims. and we would do an associated offset of that. we do account for change in the reserve when we do the underwriting for the plan, but we aren't necessarily using additional reserves, we are merely accounting for the change in the contingency reserve. >> okay. any other questions. >> with that, i will take you to slide 22 where we recommend that the health service for the approve the following. number 1, the city plan t.p.o. and city plan choice not available renewal as presented in this material, with a 10% increase to city plan rates. the resulting 2020 monthly rate cards presented in this material that i just walked through, along with the one recommended design enhancements to reduce

the family and network out of pocket maximum to two times individual limit. >> do i have a motion? >> i moved to accept the recommendations regarding one, two, and three as outlined on the slide. >> i second the motion. >> public comment on this item? seeing no public comment, all those in favour? >> aye. >> opposed? it is unanimous. all right, item number 15. >> item 15, review and approve kaiser permanente nonmedicare rates and presentations. >> mike clark, this is my final presentation today at. [laughter] >> let's hear the cheers in the room. [laughter]. >> i will present the kaiser permanente california region

renewal summary rate cards and recommendation today for active employees and early retirees, and like other presentations, we do include some information on rate card notes, and the 2019 rate cards, and for those interested, the buildup of the underwriting generated by kaiser permanente to create the renewal that we present today. on page 2, we are going to recommend that the health service board approve a five-point 9% insured plan premium increase to 2019 to 2020 for the active employees of early retirees in california who are enrolled in kaiser permanente, noting that this is a combination of four-point nine cent for the actual plan renewal , and one point -- and 1% of the unfortunate return of the federal accountable care act

health insurance tax in 2020 that was suspended by the federal government in 2019. i will note that our executive director does have a legislative update in her director's report, and there is commentary on this particular health insurance tax. we certainly hope that it attaches to legislation eventually and is ultimately suspended for 2020, but at this point, it remains the law. >> i have a question before you go. let's assume that something does happen miraculously, and it is suspended. would we be able to adjust the rate, do we have a timeframe where we could adjust the rate for 2020, or is it fixed? >> my impression would be it would depend on when such an adjustment could occur, and

conversations we would have with kaiser permanente at that time. i don't know if a representative from kaiser permanente would have further comment. >> good afternoon. i'm from kaiser permanente. i will just reinforce what mike describes. depending on when the law changed, we would be more than happy to adjust the rates as long it was before the contract went into effect. even if we didn't have an opportunity to correct in the plan here, we would reconcile in the future. thank you. >> okay. page 3 contains the same reminders about the two most common strategies. page 4, just to refresh with the board, last year we had, from

2018 until 2019, the year we are presently in, there was a 0.3% rate decrease, and so we are certainly looking in conversations with kaiser to strive for more consistent renewal and insured premium change actions from year-to-year , but again, i will note that the 5.9%, which is really from the plan cost stan point, four-point nine% is consistent with national trends. and the increased as result from two key elements. first, there was an almost eight % increase in actual per member claim experience 2017 to 2018, or early 2018 claims that serve as the basis for 2020 rate development. this is higher than prior year-over-year comparisons, and was especially higher for early retirees, and then we ha