HEALTH PLANS: Seek Rate Hike From CalPERS
California HMOs are pressuring CalPERS for a rate hike, the Sacramento Business Journal reports. The plans are reportedly "hoping for double-digit increases next year," ranging from 3% to 12%. With negotiations for next year's rates currently underway, the Sacramento Business Journal reports that the outcome of the talks "could be an indicator of an upswing" across the state's health care industry.
Kaiser Permanente, usually the "lowest-priced plan" in the CalPERS system, is reportedly "looking for a 12% premium hike." Jack Hudes, Kaiser vice president for marketing and sales in California, wouldn't confirm the figure, but said, "Our rates are low. ... We probably should have raised our rates in 1998 for our biggest customers." Hudes confirmed that Kaiser is requesting a mid-year increase from small employers of from 4% to 6%. Other health plans also are requesting rate increases. Ronald Nowosad, director of marketing and account services for Omni, said, "Omni is asking for an increase. As in the past, it's an effort to address the rising cost of medical services." PacifiCare is the only health plan "on a different schedule," because it has signed an agreement "with PERS that ties its rates in 1999 and 2000 to the Consumer Price Index" (Robertson, 2/16 issue).