HEALTH COSTS: California Firms Brace For Increases
California employers are "bracing" for hikes in their group health insurance premiums. The California Public Employees' Retirement System has tentatively agreed to pay an average increase of 5.1% to nine of the HMOs it contracts with. Increases paid by the one-million member retirement system are "likely to set the pace in the private-sector commercial market." Under the agreement, CalPERS would pay the following rate hikes: 9.2% for Omni, 8% for Blue Shield, 5.9% for Health Net, 4.7% for Lifeguard, 3.8% for Aetna/US Healthcare and 2.5% for PacifiCare. The deal "excludes Kaiser Permanente," which has requested a "staggering" 12% hike in 1999 premiums. Kaiser has proposed a similar increase for Pacific Business Group on Health, which represents 21 large employers in Northern California. Small employers with Kaiser can expect a 6% hike in July and another 5% increase next January. Some firms, such as software company USCS, avoided an increase to its $8 million health care budget by switching plans. The nearly 3,000-employee company had been self-insuring, but in January it signed with Blue Cross of California (Robertson, Sacramento Business Journal, 4/20).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.