CALPERS: Will Group’s Premiums Jump to 10%?
All eyes are on the California Public Employees' Retirement System which may give permission to Kaiser Permanente to raise premiums by 10%. The second largest buyer of health plans, CalPERS covers about 1 million state and local government employees and acts as a bellwether for other employers on rate increases. The CalPERS health-benefits committee will meet Tuesday to review Kaiser Permanente's drafted HMO rates, along with those provided by Foundation Health Systems, PacifiCare Health Systems, Aetna and Cigna. Despite the rumors, CalPERS spokesperson Pat Macht maintains, "There is no agreement. There are certain issues on the table that can affect changes in rates and the ultimate outcome of premiums. They are continuing to be evaluated." Kaiser officials' lips are also sealed. HMO spokesperson Kathleen McKenna explained, "We just don't discuss publicly what rate we're seeking before it's presented to the CalPERS board." But if the rate hike is approved, HMOs across the country will be smiling, as premium increases of 10% "decrease the likelihood of any earnings shortfalls," Todd Richter, a Banc of America Securities analyst, said. Fox-Pitt Kelton health analyst Greg Crawford, added, "People have expressed concern that there will be a pushback (in premium increases) in 2001. And this will be initial evidence that there won't be" (Finkle, Bloomberg News/Contra Costa Times, 4/14).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.