CalPERS Panel Negotiates Lowest HMO Rate Increase in Decade
On Wednesday, the CalPERS Health Benefits Committee approved HMO premium increases projected at about 6.6% on average, the San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 6/19).
The average increase is expected to be the lowest in a decade, the Sacramento Business Journal reports.
Under the committee's recommendations, the monthly premium increases range from 3.75% for workers in Blue Shield of California's Net Value plan to 8.16% for Kaiser Permanente members in 2009. The increases also vary by region.
Medicare beneficiaries whose benefits are administered through Blue Shield will not see rate increases, while Kaiser Medicare plan members will see a 2.49% increase (Robertson, Sacramento Business Journal, 6/18).
The full CalPERS board is expected to vote on the committee's recommendations today.
Priya Mathur, chair of the health benefits committee, said, "We are approving the Kaiser rate under protest," adding that Kaiser should base rate increases on CalPERS' size and claims experience rather than general market trends.
To come in with its lower premium increases, Blue Shield used a rollover credit stemming from lower-than-expected use of hospitals and physicians by CalPERS members in 2007 and 2008 (San Francisco Chronicle, 6/19).
According to Gregory Franklin, acting chief of the Office of Health Plan Administration, Blue Shield's premium increases would have been 8.31% without the rollover credit.
Kathleen McKenna, a Kaiser spokesperson, said Kaiser's proposed rate increase is similar to Blue Shield's proposal without the rollover credit (Sacramento Business Journal, 6/18).
The HMO increases that CalPERS sets are usually consistent with national trends and widely viewed by employers nationwide as an early benchmark for health care costs, the Sacramento Bee reports.
CalPERS' premiums rose 80.8% from 2002 to 2007, while premiums nationwide rose 78.5% over the same period, according to the California HealthCare Foundation.
About 862,000 people are members of CalPERS HMOs (Ortiz, Sacramento Bee, 6/19).