CalPERS Committee Votes To Approve Regional Membership Plan
The CalPERS health committee on Tuesday voted to approve a plan that would divide its membership into five regions and charge different rates for health coverage based on which region a member lives in, the San Francisco Chronicle reports. The move is part of an effort to retain members, after public agencies representing 37,000 members withdrew from CalPERS - which has 1.2 million members and is the nation's third-largest purchaser of health care -- at the beginning of the year, in part because they had negotiated lower health insurance premium rates with other health plans (Colliver, San Francisco Chronicle, 3/17). In August, 27 public agencies announced that they would discontinue health insurance coverage through CalPERS and would instead find their own coverage, citing the fund's 2004 health insurance rate increases. Twenty of the agencies that withdrew from CalPERS are in Southern California, where health care costs are lower and there is more hospital competition than in Northern California. The withdrawals came after CalPERS board members in May 2003 did not approve a regional pricing plan that would have required members in Northern California to pay higher premiums than those in Southern California (California Healthline, 3/16). According to the Chronicle, the health committee's vote "does not lock" the full board into approving the plan, but it does allow the directors to get information about premiums for the five regions, four of which will be in California and one will include out of state residents covered by CalPERS. A report detailing those premiums will be presented next month, and the full board will vote on the proposal in June (San Francisco Chronicle, 3/17).
CalPERS trustees on Tuesday said that they would "move ahead" with a plan to eliminate coverage for CalPERS members at some California hospitals, including 15 owned by Sutter Health, the Sacramento Bee reports (Rapaport, Sacramento Bee, 3/17). CalPERS officials say that plan would save about $72 million in premiums, with about $53 million of the projected savings resulting from ending coverage at hospitals owned by Sutter (California Healthline, 3/16). CalPERS staff members said that they had made "considerable progress in negotiations with Sutter," adding that hospital chain officials had "agreed in concept" to let Blue Shield of California exclude the 15 Sutter hospitals from an HMO plan for CalPERS members. CalPERS officials also suggested a proposal that would include all Sutter facilities in a health plan for CalPERS members if Sutter would discount prices for them; CalPERS officials said that they had reached an "agreement in concept" with Sutter for a "scenario under which this might be possible." A third option, which Sutter had not agreed to, would create two separate Blue Shield HMOs for CalPERS members -- one that included all Sutter hospitals but would cost more and one that excluded Sutter and have lower premiums. According to the Bee, CalPERS is expected to reach a final decision on the matter in the next month (Sacramento Bee, 3/17).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.