CalPERS Committee Rejects Health Benefit Changes
The CalPERS health benefits committee on Tuesday voted to rejected proposed health benefits changes that included increased copayments for visits to doctors and emergency departments, the Los Angeles Times reports. CalPERS is the third-largest purchaser of health care in the U.S., with more than one million members.
Saying that more study is needed on how to secure lower prices from providers, the health committee rejected proposals to:
- Increase copays from $10 to $15 for doctor visits and from $50 to $75 for ED visits (Lifsher, Los Angeles Times, 6/21);
- Discontinue HMO coverage in five rural counties; and
- Implement a point-of-service plan in eight counties, in place of the current HMO plan (Chan, Sacramento Bee, 6/21).
The committee approved premium rate increases of 11.6% for HMO members and 12.9% for PPO members. CalPERS had proposed the changes to benefits to avoid such premium increases (Los Angeles Times, 6/21). Under the approved plan, premiums would increase by 13.09% in 2007 for members of a Blue Shield of California HMO, compared with a 7.03% increase under the rejected plan (Sacramento Bee, 6/21).
Last year, premiums increased by 8.7% (San Francisco Chronicle, 6/21).
State and local government employers will pay about 80% of the premium increase for CalPERS members it employs, with employees contributing the remainder through higher payroll deductions. Contributions from local governments will vary depending on contract terms.
The committee also awarded Blue Shield a $4.5 billion, three-year contract renewal and authorized the creation of a PPO plan that would limit the number of in-network doctors. The new PPO is intended to keep premium increases at less than half those of current plans.
The full CalPERS board is expected to endorse the committee's decision on Wednesday. Maintaining current benefits will cost CalPERS at least $55 million more for health care coverage next year (Los Angeles Times, 6/21).