Full Board of CalPERS Approves Health Insurance Premium Increases for 2004
As expected, the full board of the California Public Employees' Retirement System yesterday approved an increase in health insurance premiums of 16.7% to 18.4% for those enrolled in HMO and preferred provider organization plans, the Contra Costa Times reports. Medicare plans' premium increases will range from 23.4% to 27.8%; all premium increases depend on details of CalPERS' contracts with the insurers, according to the Contra Costa Times (Silber, Contra Costa Times, 6/19). In its 7-5 vote, the board also approved an increase in emergency room fees and prescription drug copayments, the AP/Sacramento Bee reports (Brice, AP/Sacramento Bee, 6/18). For members enrolled in Kaiser Permanente health plans, prescription drug copays will increase from $5 to $10 for generics and from $15 to $20 for brand-name drugs. All other plans' copays will increase from about $30 to $45 for brand-name medications (California Healthline, 6/18). Members of Blue Shield of California, Kaiser or Western Health Advantage in 2004 will begin paying a $50 emergency room fee -- an increase of $25 for members under age 65, and an increase of $50 for members over age 65, who now pay nothing for emergency room visits, according to the AP/Bee (AP/Sacramento Bee, 6/18). An emergency room fee of $75 for all members had originally been proposed (California Healthline, 6/18). The 1.2 million CalPERS members will likely pay "most -- if not all -- of the rate increase," the Contra Costa Times reports (Contra Costa Times, 6/19).
Perry Kenny, president of the California State Employees Association, said the rate increases will require workers to pay too much of the cost of their health care, adding that members over age 65 "shouldn't have to pay anything" because the state previously had promised them complete health coverage for life (AP/Sacramento Bee, 6/19). However, the increases are "substantially lower" than the 31% premium hikes proposed by HMOs because of the additional fees, the Los Angeles Times reports (Los Angeles Times, 6/19). Some critics have said that the large increase in rates indicate that the system "is no longer the national leader it once was in controlling health care costs," the Wall Street Journal reports (Wall Street Journal, 6/19). Sean Harrigan, president of CalPERS, said, "I believe we have achieved the best possible outcome today, but we must make clear the need for structural reform. Without an overhaul of this country's health care system, I cannot see the ability of any purchaser -- even one the size of CalPERS -- to keep cost increases at bay and quality of care affordable" (Bloomberg/New York Times, 6/19).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.