CalPERS Committee Recommends HMO Premium Increases Averaging 8.7%
The CalPERS health committee on Tuesday proposed premium increases for its three HMO plans averaging 8.7% and a 9.5% increase in premiums for its PPO plan for its 2006 contracts, the Contra Costa Times reports (Silber, Contra Costa Times, 6/15). If approved by the CalPERS board in a vote scheduled for Wednesday, the increase would be the smallest rise in premiums since 1999 (Rapaport, Sacramento Bee, 6/15).
For Medicare beneficiaries who receive benefits through a PPO, premiums would rise by 18.6% (Contra Costa Times, 6/15). For Medicare beneficiaries who receive benefits through HMOs, premiums will decrease by 7% on average in part because of increased federal funding.
As expected, the committee did not propose major changes to copayments or prescription drug coverage (Colliver, San Francisco Chronicle, 6/15).
The committee's recommendation is less than the average HMO rate increase forecast last week by Hewitt Associates, a human resources consulting firm. In addition, the low premium increase could be "the first sign" that CalPERS "may achieve long-term savings from last year's controversial move to drop coverage" at the most costly hospitals in the HMO network, the Bee reports (Sacramento Bee, 6/15).
Following a 2003 peak in annual premium increases of 24.1%, premiums rose by 16.4% in 2004 and by nearly 10% in 2005 (Contra Costa Times, 6/15). According to the Bee, the annual contracts negotiated by CalPERS are generally seen as an early indicator of premium and coverage changes for U.S. residents with employer-sponsored health coverage nationwide (Sacramento Bee, 6/15).