CalPERS Committee to Examine Savings Proposals
The California Public Employees' Retirement System health benefits committee will meet tomorrow in Sacramento to vote on measures intended to "shor[e] up the plans' reserves," which could "approach zero" by the end of 2001 under the current system, the Sacramento Bee reports. CalPERS may report losses this year up to $100 million from its two self-insured health plans (PERS Care and PERS Choice) while next year's enrollment in the plans is expected to increase 13% to 263,000. Documents prepared for the board by CalPERS staff attribute the program's losses to "[d]eliberate underpricing of premiums in 1999 and 2000, unanticipated rapid enrollment growth and high drug utilization." CalPERS "already is planning to raise premiums by 19% in 2001." Proposals that will be considered at the meeting include:
- Doubling annual deductibles to $500 per person with a $1,000 per family maximum, for a savings of $19 million;
- Charging $20 co-payments for doctor visits, up from $10, which would save $7 million;
- Charging $50 emergency room co-payments, saving $2.3 million;
- Charging $250 per hospital inpatient admission for PERS Care Basic plan members, saving $ 1.3 million;
- Implementing a new co-pay schedule for prescription drugs for a possible savings of $16.1 to $38.2 million; and
- Eliminating coverage for sexual dysfunction drugs, including Viagra, saving $800,000.
If the proposals are approved, members of the self-insured plans may opt out of the programs during an open enrollment period from mid-December through January 2001. However, the proposals may face opposition by state employee unions, who defeated efforts to "institute" tiered drug benefits. California State Employees Association President Perry Kenny said that "he will continue to resist benefit changes that pass the buck to workers," noting that the association "thought [the committee] ought to look at alternatives not to put the burden on employees' backs" (Rapaport, Sacramento Bee, 12/11).
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