CalPERS Board Votes to Drop Three Health Plans

The Board of Trustees of the California Public Employees' Retirement System voted yesterday to reject the 2002 contract bids from Aetna, Cigna and Lifeguard health plans, the Sacramento Bee reports. The vote comes one month after the board "summarily tossed out" all 2002 contract bids from its 10 contracting health plans and asked them to resubmit bids with lower premium increases (Rapaport, Sacramento Bee, 3/22). Based on the resubmitted bids, the CalPERS' health benefits committee recommended that the three health plans, which represent 95,000 of the program's 1.1 million members, be dropped (California Healthline, 3/21). CalPERS will continue negotiations with the plans that offered the lowest premium increases in the second round of bidding: Blue Shield of California, Health Plan of the Redwoods, Kaiser Permanente, Maxicare, PacifiCare, Universal Care and Western Health Advantage. In addition, the board gave Health Net, which covers 240,000 CalPERS members, until today to resubmit its proposal. If the health plan fails to submit a bid, it will be dropped from CalPERS in 2002. Next month, CalPERS will "vote on the remaining HMO premium proposals and finalize its roster of 2002 health plans" (Sacramento Bee, 3/22).