CALPERS: Tells Enrollees to Look Carefully at Plans
As the California Public Employees Retirement System begins the open enrollment period for its one million-plus members, something "unprecedented" is taking place, the Wall Street Journal/California Edition reports. The state's largest purchaser of employee health insurance is steering members away from its two largest health plans, Kaiser Permanente and Health Net, recommending instead that its members "look with favor" on PacifiCare of California. CalPERS avoids any specific recommendations, but CalPERS spokeswoman Pat Macht said, "We have never pointed out ... as vigorously as we have now that you really need to examine these plans with a fine-tooth comb, because there are huge price changes." She attributes the new tack to "two straight years of rising premium costs." Last year, Kaiser was CalPERS' least expensive program. But by the year 2000, it will drop to eighth place in affordability, with Health Net moving from third place to sixth. Meanwhile, PacifiCare will climb to fourth place, up from seventh place in 1998, and it has signed a multi-year pact with CalPERS designed to offer some rate stability.
Do Recommendations Matter?
Kaiser and Health Net officials "say they're disappointed by CalPERS' actions," but doubt that the recommendations will affect enrollment. "We still believe that we offer the best value to (CalPERS) members," says Kathleen McKenna, a Kaiser spokeswoman, adding, "[I]f you look at nationwide surveys, consistently we have been rated at the top for member satisfaction." However, the Journal notes that CalPERS' actions could be highly influential, as CalPERS "covers nearly 1.1 million active and retired state and local government employees and their families" -- 80% of whom are in HMOs (Benson, 8/4).