Some small California employers (1-100 employees) that offer medical insurance coverage through Sutter Health Plan have received 4th Quarter 2025 rate increases of 50%. I have been a health insurance agent/broker since 1993, and I have never seen a rate increase like the one that Sutter has delivered.
Sutter Health Plan offers medical insurance plans in Northern California and covers small group rating areas 1-10. A few of the small group rating areas received 30%+ rate increases but many received 50% increases.
To prove the point, please see the comparison chart below which shows the 2024 and 2025 Sutter Health Plan Gold HMO MS87 plan rates for Rating Region 8, San Mateo County.
Sorry for getting a little bit wonkish here, but the ACA (Affordable Care Act, Obama Care) requires that rates for a specific health plan (e.g., Sutter Health Plan Gold HMO MS87) be identical for every employer with 1 – 100 employees in the same rating region. The rates may vary by rating region, but all small employers in that region will receive the same rates. In this way, California small group rates are NOT “experienced based,” This means that a person’s health history will not impact the rates of a specific employer.
I spoke with some industry insiders about the reasons Sutter Health Plan had such a huge rate increase and they said that it may be due to a few things, including:
- Sutter Health Plan settled a class action lawsuit where it must pay $228.5 million for overcharging other insurance companies by forcing them to accept all Sutter Hospitals, not just lower cost Sutter hospitals. This caused other insurance companies to increase their premiums to pay Sutter Health the higher amount they demanded. Now, it may be that the large settlement is forcing Sutter Health to increase the rates on their own medical insurance plans.
- Sutter Health and Sutter Health Plan (the insurance portion of the hospital and medical group system that is an integrated staff model HMO ) has new leadership, which chose to make a one-time fix to their financial woes. With such a large rate increase, Sutter Health Plan will likely lose members, which will result in less revenue. If healthy members, who use few medical services, leave and unhealthy members, who use a lot of medical services, stay with Sutter, it may just make Sutter Health Plan’s problems worse. They could have fewer paying members with much higher medical costs to treat those members.
- High costs associated with Sutter Health Plan members receiving care from hospitals outside of the Sutter Health Plan system. I was told that specifically, when Sutter Health Plan members receive care from El Camino Health medical providers, the Sutter Health Plan loses a lot of money.
I find the Sutter Health Plan’s huge rate increase shocking, because, like Kaiser, they are an integrated health care delivery system where the doctors, hospitals and insurance plan are basically one entity. They control the costs of medical care. This article about a then new Kaiser facility describes the high quality, low cost advantages of an integrated healthcare delivery system. One would think that with the ability to control the cost of medical care, that Sutter Health Plan could avoid such a shockingly high premium rate increase.
Regardless of Sutter Health Plan’s reasons for increasing rates 50%, the result is that small businesses will likely change insurance companies. There are many lower cost insurance companies that small employers can switch to. Please give us a call at (800)746-0045 if you would like us to become your agent and assist you and your employees find lower cost employer-sponsored medical insurance.
One challenge with changing to a different insurance company is that Sutter doctors may only work for Sutter Health Plan and employees and their families must find new doctors. A work around may be finding a different insurance company, such as Health Net or Anthem Blue Cross of California that offers an HMO that includes Sutter Health Medical Group doctors. If the rates are lower, it may make sense to change to a different insurance company and still keep the same doctors.
We are here to assist small businesses find affordable group medical insurance that fits the company’s budget and meets the needs of employees and their families. Give Benefits Cafe a call at 800-746-0045.
Sutter Health Plan (CA)
Gold MS87 HMO (PDF)
4th Quarter 2024 – Area: CA08 (94070) San Mateo County (PDF)
4th Quarter 2025 – Area: CA08 (94070) San Mateo County (PDF)
| Age Band | 4th Quarter 2024 | 4th Quarter 2025 | Dollar Change | Percent Change |
|---|---|---|---|---|
| 0-14 | $384.35 | $575.98 | $191.63 | 50% |
| 15 | $418.51 | $627.18 | $208.67 | 50% |
| 16 | $431.57 | $646.76 | $215.19 | 50% |
| 17 | $444.64 | $666.33 | $221.69 | 50% |
| 18 | $458.70 | $687.41 | $228.71 | 50% |
| 19 | $472.77 | $708.50 | $235.73 | 50% |
| 20 | $487.34 | $730.33 | $242.99 | 50% |
| 21 | $502.43 | $752.93 | $250.50 | 50% |
| 22 | $502.43 | $752.93 | $250.50 | 50% |
| 23 | $502.43 | $752.93 | $250.50 | 50% |
| 24 | $502.43 | $752.93 | $250.50 | 50% |
| 25 | $504.42 | $755.93 | $251.51 | 50% |
| 26 | $514.47 | $770.99 | $256.52 | 50% |
| 27 | $526.53 | $789.06 | $262.53 | 50% |
| 28 | $546.13 | $818.42 | $272.29 | 50% |
| 29 | $562.20 | $842.52 | $280.32 | 50% |
| 30 | $570.24 | $854.56 | $284.32 | 50% |
| 31 | $582.30 | $872.63 | $290.33 | 50% |
| 32 | $594.36 | $890.70 | $296.34 | 50% |
| 33 | $601.89 | $902.00 | $300.11 | 50% |
| 34 | $609.93 | $914.04 | $304.11 | 50% |
| 35 | $613.95 | $920.07 | $306.12 | 50% |
| 36 | $617.97 | $926.09 | $308.12 | 50% |
| 37 | $621.99 | $932.11 | $310.12 | 50% |
| 38 | $626.01 | $938.14 | $312.13 | 50% |
| 39 | $634.05 | $950.18 | $316.13 | 50% |
| 40 | $642.09 | $962.23 | $320.14 | 50% |
| 41 | $654.14 | $980.30 | $326.16 | 50% |
| 42 | $665.70 | $997.62 | $331.92 | 50% |
| 43 | $681.78 | $1,021.71 | $339.93 | 50% |
| 44 | $701.87 | $1,051.83 | $349.96 | 50% |
| 45 | $725.49 | $1,087.21 | $361.72 | 50% |
| 46 | $753.62 | $1,129.38 | $375.76 | 50% |
| 47 | $785.27 | $1,176.81 | $391.54 | 50% |
| 48 | $821.45 | $1,231.02 | $409.57 | 50% |
| 49 | $857.12 | $1,284.48 | $427.36 | 50% |
| 50 | $897.31 | $1,344.71 | $447.40 | 50% |
| 51 | $937.00 | $1,404.19 | $467.19 | 50% |
| 52 | $980.71 | $1,469.70 | $488.99 | 50% |
| 53 | $1,024.93 | $1,535.95 | $511.02 | 50% |
| 54 | $1,072.66 | $1,607.48 | $534.82 | 50% |
| 55 | $1,120.39 | $1,679.01 | $558.62 | 50% |
| 56 | $1,172.13 | $1,756.56 | $584.43 | 50% |
| 57 | $1,224.39 | $1,834.86 | $610.47 | 50% |
| 58 | $1,280.15 | $1,918.44 | $638.29 | 50% |
| 59 | $1,307.79 | $1,959.85 | $652.06 | 50% |
| 60 | $1,363.55 | $2,043.42 | $679.87 | 50% |
| 61 | $1,411.79 | $2,115.70 | $703.91 | 50% |
| 62 | $1,443.44 | $2,163.13 | $719.69 | 50% |
| 63 | $1,483.13 | $2,222.62 | $739.49 | 50% |
| 64+ | $1,507.24 | $2,258.75 | $751.51 | 50% |
