CalPERS ‘Aggressive Financial Turnaround Plan’ for Self-Insured Health Plans Has ‘Positive Effects’
CalPERS officials yesterday announced "signs of progress" in an "aggressive financial turnaround plan" that the pension fund launched in February, the Sacramento Bee reports. The turnaround program included "substantial hikes" in copayments for doctor visits and prescription drugs for members of two of CalPERS' self-insured health plans -- PERS-Care and PERS-Choice -- after the plans posted a $100 million loss last year. Under the program, which affected PERS-Care and PERS-Choice members, CalPERS:
- Raised the annual deductible two fold to $500 per individual and $1,000 per family.
- Established a three-tier prescription drug benefit with $5, $15 and $30 copayments for generic, formulary and nonformulary drugs, respectively.
- Established a copayment -- $10, $25 and $45 for generic, formulary and nonformulary drugs, respectively -- for members who order a three month supply of a prescription through the mail and placed a $1,000 cap on "outlays for members who use the mail-order option."
- Doubled the copayment for office visits to $20.
- Established a $50 emergency room copayment.
- Established a $250 copayment for "each hospital admission" for PERS-Care Basic plan members.
According to Ralph Cobb, acting chief of the self-funded program division at CalPERS, the plan has resulted in "some positive effects." The Bee reports that CalPERS has "already seen a difference in how members fill prescriptions." Cobb said, "We are seeing increased generic substitution with both retail and mail-order purchases, and we are seeing some shift from use of retail to mail order." Allen Feezor, CalPERS assistant executive officer for health benefits, said, "We walk a narrow line between our responsibility for the overall plan's financial solvency and the burden in cost-sharing to enrollees." In the fiscal quarter that ended Sept. 30, CalPERS spent $82.51 on average per member per month, compared to $87.25 in the first quarter of 2001. However, CalPERS will not "know if the benefit changes initiate a lasting change" for "many quarters," Feezor said, adding, "We're not out of the woods yet" (Rapaport, Sacramento Bee, 12/19).
This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.