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Rate Setting and Regulating is Hard - by Wesley Sanders

evensun.substack.com · 1,689 words · saved by 1 readers

After my post yesterday, a few folks reached out to me and suggested I may be wrong on why Kaiser is being suppressed. I alluded to the possibility of network capacity being one of the reasons, but I focused on the financial losses. I think it may be a combination of the two. In Kaiser’s own rate filings, they project a loss ratio of 94.6% which means they were planning on a loss in 2026. Their actuarial memo also references a capital contribution: All of this suggests that losses alone were not the sole driver of their decision. However, I suspect the number of members they were getting definitely became a concern - that same actuarial memo showed they expected the market to contract by 35% If the CMS OEP Snapshot report is any indication, a 35% contraction in the market is likely not to materialize. Their rate filing projected 693,000 member months for 2026, which implies a meaningful decrease in membership from 2025, where just through third quarter, they had 700,000 member months.

After my post yesterday, a few folks reached out to me and suggested I may be wrong on why Kaiser is being suppressed. I alluded to the possibility of network capacity being one of the reasons, but I focused on the financial losses. I think it may be a combination of the two. In Kaiser’s own rate filings, they project a loss ratio of 94.6% which means they were planning on a loss in 2026. Their actuarial memo also references a capital contribution: All of this suggests that losses alone were not the sole driver of their decision. However, I suspect the number of members they were getting…

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