CalPERS Panel Approves Lowest Premium Increase Since 1998
On Tuesday, CalPERS' Pension and Health Benefits Committee recommended an average health plan premium increase of 3.03% for 2014, which would be the lowest rate increase since 1998, the Sacramento Business Journal reports (Robertson, Sacramento Business Journal, 6/18).
Efforts To Boost Insurer Competition
CalPERS has expressed frustration with increasing health care costs and a lack of improvement in workers' health.
In April, the CalPERS Board of Administration voted to award five HMO contracts, thereby breaking up Blue Shield of California's previous exclusive statewide contract.
In addition to Blue Shield, the CalPERS board then voted to approve new HMO contracts with:
- Anthem Blue Cross;
- Health Net;
- Sharp Health Plan; and
- UnitedHealth Group.
CalPERS also has a separate HMO contract with Kaiser Permanente.
The new contracts will start next year, according to CalPERS officials (California Healthline, 4/18).
The proposed rate increase approved Tuesday is partly the result of CalPERS' efforts to increase competition by adding more insurers, the Business Journal reports.
Details of the Rate Increase Recommendation
The CalPERS panel's recommendation includes:
- Raising basic HMO rates by an average of 3.81%;
- Raising basic PPO rates by an average of 2.51%;
- Increasing Medicare HMO rates by an average of 5.76%; and
- Decreasing Medicare PPO rates by an average of 8.7% (Sacramento Business Journal, 6/18).