A request to relax certain financial conditions imposed on several Geisinger-operated insurance providers is prompting calls from a coalition focused on health care affordability to freeze or lower insurance costs and relieve pressure on patients and residents.<\/p>\n
It comes after the nonprofit Risant Health completed in 2024 its acquisition of Danville-based Geisinger Health<\/a>, closing a transaction the local health system and the California-based health care giant Kaiser Permanente announced in April 2023. The acquisition made Geisinger the first to join Risant, a nonprofit created by Kaiser Foundation Hospitals.<\/p>\n Shortly before officials announced the completed acquisition, Pennsylvania Insurance Commissioner Michael Humphreys issued an order in late March 2024 approving an application by Risant and Kaiser Foundation Hospitals to acquire control of the Geisinger-operated insurers Geisinger Health Plan, Geisinger Quality Options Inc. and Geisinger Indemnity Insurance Co. Among other financial terms, the order set \u201cRisk-Based Capital\u201d conditions requiring the insurers to maintain certain levels of capital reserves for solvency protection \u2014 levels Risant and the insurers now want lowered.<\/p>\n With that request pending before the Pennsylvania Insurance Department, members of the grassroots group Action Together NEPA and the SEIU Healthcare PA union are calling for a public hearing on the matter so individuals can testify to the financial burden posed by high insurance costs. They also want the department to \u201censure that parent corporation Kaiser Permanente uses its $82 billion in net worth to freeze health insurance costs for working people struggling to afford care,\u201d the coalition noted in a press release.<\/p>\n \u201cOur request to the Pennsylvania Insurance Department is clear: we need transparency, clarity and accountability from Geisinger-Risant and Kaiser, and we need a freeze on healthcare costs for the hardworking residents of Northeast Pennsylvania,\u201d Action Together NEPA Executive Director Alisha Hoffman-Mirilovich said in the release. \u201cIn the past decade, we\u2019ve seen insurance and healthcare corporations become much bigger and more powerful, gaining a greater and greater ability to drive up prices. Working people are suffering right now, and the Insurance Department should step up to make sure that these huge corporations are using their vast resources to hold down costs, not continue raising them.\u201d<\/p>\n Investments \u2018at risk\u2019<\/p>\n A state filing<\/a> requesting the risk-based capital modification notes Geisinger committed about $2.6 billion in new capital projects, including the system\u2019s roughly $880 million expansion of the Geisinger Medical Center campus in Danville and a $900 million investment in a new hospital tower at Geisinger Wyoming Valley Medical Center<\/a> in Plains Twp.<\/p>\n But it also contends Geisinger\u2019s \u201cunprecedented investments in Pennsylvania\u2019s rural communities are at risk due to the persistent underfunding\u201d of the state\u2019s HealthChoices Medicaid program, noting state payment rates for 2026 \u201cfall meaningfully short\u201d of what\u2019s required to meet the cost of care for some 260,000 Medicaid beneficiaries served by Geisinger Health Plan.<\/p>\n It also notes the escalating cost and use of specialty drugs and surging Medicaid drug spending, as well as Medicaid changes included in President Donald Trump\u2019s signature \u201cOne Big Beautiful Bill Act,\u201d as factors that will \u201cexacerbate the Medicaid funding crisis for years to come.\u201d Geisinger Health Plan is estimated to lose as many as 38,000 members as a result of pending Medicaid work requirements and six-month eligibility reevaluations mandated by Trump\u2019s OBBBA, \u201cwhile the acuity of the remaining members materially increases,\u201d per the filing.<\/p>\n The request to relax the risk-based capital or RBC requirements set in 2024 is made necessary by these \u201cunforeseen and material adverse developments.\u201d Doing so would free up about $100 million Geisinger could invest elsewhere in its operation, Geisinger CEO Terry Gilliland told the Philadelphia Inquirer newspaper last month<\/p>\n \u201cWhile Geisinger Health has a strong balance sheet, its resources are strategically allocated to transformative projects and community investments that further its mission to provide quality health care throughout the underserved 23-county primary service area,\u201d the filing notes. \u201cDiverting these resources to cover Medicaid shortfalls and to satisfy the higher than necessary RBC requirements undermines these important community projects and permanently impacts the integrated system\u2019s ability to meet the needs of the rural communities it serves.\u201d<\/p>\n Reducing RBC requirements will allow the insurers to allocate more funds toward \u201cdelivering high-quality care\u201d and \u201cmitigate the impact of recurring annual capital infusions\u201d made by Geisinger to the insurers, \u201cempowering Geisinger Health to sustain its vital community investments.\u201d<\/p>\n Cost concerns<\/p>\n Action Together NEPA and SEIU Healthcare PA both responded to Risant\/Geisinger\u2019s request for RBC relief in written public comments highlighting the cost of health insurance, with the former expressing a belief that \u201cquality of care cannot be provided to the public if insurance coverage is unaffordable.\u201d It also pointed to \u201csubstantial premium rate increases\u201d Geisinger asked the state Insurance Department to approve last year for its Geisinger Health Plan and Geisinger Quality Options plans.<\/p>\n The department released in October final Affordable Care Act health insurance rates for 2026<\/a>, noting new enrollment rules included in Trump\u2019s OBBBA and Congress\u2019 failure to extend expiring ACA tax credits \u201cresulted in significant price increases for Pennsylvanians.\u201d Approved average rate increases for Geisinger Health Plan and Geisinger Quality Options individual market plans were about 11.6% and 13.8%, respectively, slightly less than originally requested in both cases.<\/p>\n \u201cIf the rise in the cost of healthcare necessitated significant increases in premiums \u2026 then we do not believe that it is prudent to lower RBC requirements to support facility expansions,\u201d Hoffman-Mirilovich, Action Together NEPA\u2019s executive director, wrote in her public comment<\/a>. \u201cWe would ask the (state Insurance) Department to deny this request, or predicate approval on a requirement that Geisinger (Risant) work toward reducing or freezing healthcare costs for northeastern Pennsylvania consumers in the coming years.\u201d<\/p>\n