CalPERS Committee Approves Increased Copays, Board to Vote Today

CalPERS' health benefits committee voted yesterday to approve 2002 contract proposals from eight HMOs that would increase copayments for CalPERs members for the first time since 1993, the Sacramento Bee reports (Rapaport, Sacramento Bee, 4/18). The full CalPERS board will vote today on the proposal, which would also result in a 6% overall premium increase, from $1.65 billion this year to $1.76 billion next year (Rundle, Wall Street Journal, 4/18). The 6% premium hike would be smaller than the 9.2% increase in 2001 and the 9.7% increase in 2000 (Gellene, Los Angeles Time, 4/18). Under the proposed new copay rates, instead of the current $5 copay for doctor visits and prescription drugs, CalPERS members would pay $10 to visit the doctor, $15 for a 30-day supply of brand-name drugs, $30 for drugs "not on the HMO formulary" and $5 for generic drugs (Wolfson, Orange County Register, 4/18). For a 90-day supply of medications purchased by mail, members would pay $10 for generics, $25 for brand-name drugs and $45 for non-formulary drugs (Los Angeles Times, 4/18). Without the copayment changes, CalPERS would have to raise premiums by 13%, a CalPERS spokesperson said. A plan containing similar changes was rejected by the benefits panel last year. However, committee members said that the changes represented the "best possible" solution to rising health costs. Rob Feckner, head of the health benefits committee, said, "In as tough a health care market as we have today, we believe this package ... retains a good measure of quality, plan choice and affordability for our members" (Wall Street Journal, 4/18).

The California State Employees Association, which represents 140,000 CalPERS members, criticized the committee's plan for increased drug co-pays, and union president Perry Kenny said that he would ask the full board to reject the proposal (Sacramento Bee, 4/18). "Nobody goes to doctors because they want to run up costs. It is the people who are most ill who need it most and they will get penalized the most," he said (Los Angeles Times, 4/18). However, industry representatives and some analysts said that greater cost-sharing was needed to help rein in consumer costs and prevent employers from dropping coverage altogether. Bobby Pena, spokesperson for the California Association of Health Plans, said, "We have consumer demand that has really skyrocketed. Some people are going to argue that you're limiting people's access because they can't afford the co-pay. But what you're looking at in reverse is employers perhaps not even being able to afford coverage at all" (Orange County Register, 4/18). Peter Lee, president of the Pacific Business Group on Health, added, "Virtually all purchasers [of health insurance], both public and private, believe the only way to impact health care costs over the long term is by having individual consumers see how their choices impact prices" (Sacramento Bee, 4/18).