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About Kaiser Permanente
The history of Kaiser Permanente goes back to 1933, when Industrial Indemnity was formed by industrialist Henry J. Kaiser to handle Worker’s Compensation for employees. At the same time, Dr. Sidney Garfield founded a small hospital in Desert City, CA, contracting with Industrial Indemnity to provide care to workers building the Colorado River Aqueduct. The partnership between Garfield and the Kaiser company led to expansion to cover the families of workers, and eventually to the creation of the Permanente Health Plan in 1942.
As WWII came to an end, the growing health care company began offering coverage to the general public. As Henry Kaiser became more involved with the company, his name was added to create what is known today as Kaiser Permanente.
By 1977, Kaiser Permanente was operating in six different regions and was federally qualified as a managed care provider in each. After much expansion, the 1990s saw Kaiser closing or selling operations in areas like Texas and North Carolina.
Today Kaiser operates in eight states as well as the District of Columbia, and has more than ten million members. The company’s headquarters is located in Oakland, California, and they employ nearly 200,000 people. As a managed care consortium, Kaiser Permanente operates as three interdependent companies, forming a blend of for profit and not-for-profit organizations.
Over its history, Kaiser has had a number of high profile controversies and lawsuits, including allegations of patient dumping and using arbitration processes to delay care. On the flip side of those issues, Kaiser has continued to receive excellent ratings throughout the industry.
Kaiser plans can be purchased easily online or over the phone, and information on the plans is easy to access.
Kaiser Permanente offers Medicare Advantage that includes Part D Prescription Drug coverage. These vary depending on the state and even the county in which you live. This review will focus on our sample state, California, and provide plan information for the area where we usually compare coverage and rates.
All Kaiser Medicare plans are HMO plans, and offer coverage through a network that is relatively large, particularly in areas like California where they have been operating for a long time.
There appears to be only one Medicare Advantage plan available in our sample area. This is the Senior Advantage Plan, and it is a $0 premium option that requires only payment of the regular Original Medicare premium. There is no deductible for coverage, and both office visits and specialist visits have a $10 co pay, as do Urgent Care visits. Emergency care carries the standard $75 co pay.
Inpatient hospital care is covered with a $240 per day co pay for the first seven days. Seven days is a longer time period than most Advantage plans, which average five days of required co pays; however, the co pay in this case is on the lower end of the spectrum. That does offer some balance to the cost.
Part D coverage for this plan starts at $3 co pays for Tier 1 drugs. Tier 2 is $10, Tier 3 $45, and Tier 4 has a $95 co pay. Like most companies, Tier 5 drugs move to a coinsurance, which is 25%.
The Senior Advantage plan provides vision and hearing benefits, but there is no dental coverage. This can be added for a cost by purchasing the Advantage Plus plan, which also offers extended vision and hearing coverage and the company’s senior fitness benefit.
Kaiser also has a plan in California that is available to those who qualify for both Medicare and MediCal, which combines benefits into one package.
Kaiser’s Medicare Advantage plan in California, as noted, is a $0 premium plan, which means you pay nothing beyond the regular Medicare Part B premium. The Advantage Plus option, which adds extended vision, dental, and hearing benefits, costs $20 per month.
Rates may vary in other locations, but based on other rates we have seen for this coverage area, Kaiser’s plan is very affordable. Co pays are low and there are no deductibles. It’s important to note, however, that part of the reason HMOs are so affordable is that coverage is only offered within the network. Fortunately, Kaiser is a large company with a good-sized network of providers, but this may be a deterrent to those who already have doctors they would prefer to stay with.
Ratings and Reviews
According to the Kaiser site, their Medicare Advantage plan has been awarded five stars – the highest rating – by the Centers for Medicare and Medicaid. This is the official rating system for Medicare plans.
The Better Business Bureau (BBB) has multiple records for Kaiser covering various locations across the country, making it difficult to get a good picture of how the BBB rates them overall. The record for the head office in Oakland, CA has a dismal D- rating as a result of failure to respond to 10 complaints filed there. 53 complaints were filed in the past three years, and 18 of those were closed in the past 12 months.
Of 677 reviews on Consumer Affairs, 144 left star ratings, and 131 of those were one-star ratings. Most of the reviews are negative, although there are a few positive ones sprinkled in. For a company as big as Kaiser, this isn’t an overwhelmingly large complaint volume, but still notable.
The National Committee for Quality Assurance ranks Kaiser of Northern California at 5 stars overall, and Kaiser of Southern California at 4.5 stars overall. In both cases the customer satisfaction ratings were lower than the other factors.
In spite of high rankings from official sources, there do appear to be some issues with Kaiser’s customer service. We expect a fairly high complaint volume with a large insurance company, but the negative customer reviews combined with multiple lawsuits and controversies over the years may give some insurance shoppers pause. As a final thought on reviews, it should be kept in mind that the majority of the reviews are for Kaiser’s other plans, and not for the Medicare plan specifically.
The Bottom Line
Kaiser is a huge company, so they must be doing something right; certainly their low cost is a big factor in their success. For those who are comfortable with the restrictions of an HMO – or who might already be Kaiser customers and have existing doctor relationships – this Medicare plan may be appealing. It is certainly appealing in terms of cost and a high rating from Medicare.
For a list of companies that we recommend, visit our Best Insurance Companies page.