CalPERS Board Approves Premium Hikes
The California Public Employees' Retirement System Board of Administration yesterday approved enrollee premium increases for its two self-funded preferred provider organizations, PERSCare and PERS Choice. In 2002, PERSCare premiums paid by members will increase 24.4% and the cost of supplemental coverage under PERSCare will increase 15.9%. In addition, the board approved a 16.4% premium increase for PERS Choice and a 16.1% increase for supplemental coverage under that plan (CalPERS release, 5/17). CalPERS officials said the increases are partly due to the need to stabilize the self-funded plans, which suffered nearly $100 million in losses last year (California Healthline, 5/16). The increases will also help the plans implement AB 88, which mandates coverage for severe mental illnesses. William Crist, president of the CalPERS board, said, "We do not like to increase premiums, and we are going to redouble and redouble again our efforts to avoid additional future increases. However, this action is critical at this time to the financial stability of these plans. Rapid enrollment growth, increased use of prescription drugs, increasing provider price demands and the reduction of reserves in the past make these increases necessary." The premium hikes will affect the more than 200,000 members who belong to the two plans (CalPERS release, 5/17).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.