By dropping UC Health in the middle of a coverage cycle, Blue Shield will disrupt medical care for tens of thousands of patients across the Bay Area and California

SAN FRANCISCO (June 27, 2025) — San Francisco City Attorney David Chiu and Supervisor Matt Dorsey sent a letter to Blue Shield yesterday urging the health insurer to resolve its dispute with UC Health and to ensure Blue Shield members continue to have access to in-network health care at UC Health facilities. If Blue Shield does not reach an agreement to keep UC Health in its provider network by July 10, tens of thousands of California and Bay Area members will lose the ability to see UC Health providers at in-network rates.
The inability to access care at UCSF medical facilities could be particularly painful as the UCSF Health system is one of the largest health care providers in the Bay Area. San Francisco City employees and retirees who have Blue Shield insurance through the San Francisco Health Service System (SFHSS) will also be harmed by Blue Shield suddenly dropping UCSF facilities and physicians in the middle of a coverage period.
“It’s almost cliché to say that a health insurance company is putting profits over patients, but that is certainly what Blue Shield is doing,” said City Attorney David Chiu. “Medical care for tens of thousands of patients across California and the Bay Area will be disrupted if Blue Shield does not act in good faith. Patients go to UCSF for primary care as well as life-saving treatments, and Blue Shield cannot allow that treatment to be compromised. The City would likely have chosen a different insurer had we known Blue Shield would drop one of the Bay Area’s largest medical providers in the middle of a coverage period. My Office is actively exploring legal remedies in case Blue Shield fails to reach an agreement and puts patients at risk.”
“With Blue Shield’s dispute against UCSF poised to disrupt healthcare access for thousands of our city workers and retirees in just days, I applaud City Attorney Chiu for considering our legal options,” said Supervisor Matt Dorsey, who serves as the Board of Supervisors’ appointee to the San Francisco Health Service Board. “Here’s the bottom line: a large segment of our workforce relied on access to UCSF Health’s physicians and services when they chose Blue Shield during open enrollment. For Blue Shield to now materially eliminate these healthcare options — in the middle of a plan year — is, in my view, unfair and potentially a breach of contract. I urge the parties to reach agreement and restore certainty to our members’ health benefits, and for the City Attorney’s Office to thoroughly investigate whether Blue Shield’s conduct is actionable or grounds for suspension or debarment.”
Background
Blue Shield provides medical insurance to thousands of San Francisco and California residents and approximately 5,000 City employees and retirees who are members of SFHSS. According to CalPERS, approximately 35,000 CalPERS members across California have Blue Shield plans and receive care from UC Health.
If UC Health is dropped from Blue Shield’s coverage network, it will seriously disrupt medical care for SFHSS members and thousands of other UC Health patients with Blue Shield health coverage. Impacted patients will lose the ability to see their primary care physicians at in-network rates. In addition to primary care, many patients seek cancer treatments, specialty care, and other medical interventions at UC Health facilities, all of which could be at risk.
In the Bay Area, health care practitioners at UCSF Medical Center, UCSF Benioff Children’s Hospitals in San Francisco and Oakland, UCSF Medical Group, UCSF Benioff Children’s Physicians, and One Medical will be out of network to Blue Shield members.
Blue Shield’s termination of its relationship with UC Health in the middle of a coverage period is particularly troubling. Patients who chose Blue Shield coverage during open enrollment would certainly be under the impression that the coverage they chose would continue throughout the entire coverage period.
In addition, Blue Shield’s position is inconsistent with the representations it made to San Francisco officials who supported the award of the SFHSS contract to Blue Shield. The City’s Health Service System Board and its Board of Supervisors relied on SFHSS members having access to UC Health when they approved rates and benefits for Blue Shield last July. Had City officials understood that Blue Shield would take a position compromising the health care access of thousands of its members, the City and the Health Service System Board would likely have made a different decision.
Blue Shield and UC Health have until July 10 to reach an agreement on a new contract or Blue Shield members will lose access to UC Health. The City Attorney’s Office is actively exploring all available legal remedies should the parties not reach an agreement. The letter to Blue Shield can be found here.
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