PacifiCare Health Systems Begins Campaign To Attract Local Agencies From CalPERS

Cypress-based PacifiCare Health Systems yesterday began a campaign featuring HMO, preferred provider organization and some senior health care plans as part of an effort to draw local agencies from CalPERS, the Orange County Register reports. Mike Mallory, vice president of large-group sales for PacifiCare, said the company can offer local agencies "a stronger benefit package [with] anywhere from 10% to 15% in savings" over CalPERS, which today may approve premium increases of as much as 18% (Luna, Orange County Register, 6/18). The CalPERS system, which provides health insurance to about 1.2 million members, last year approved a premium rate increase of 25% and terminated its contract with PacifiCare and Health Net to help reduce costs (California Healthline, 4/18/02). As the CalPERS board decides on another double-digit premium increase for next year, officials in Santa Ana, Costa Mesa, Yorba Linda and the Orange County Fire Authority are seeking bids from other health insurers, the Register reports. Enrique Alva, executive director of personnel services for Santa Ana, said, "We're looking, and every city agency involved with CalPERS is considering pulling out." City agency officials cited a lack of regional pricing schemes -- which would lower premiums in Southern California -- as one problem with CalPERS. CalPERS spokesperson Clark McKinley said it is prudent for health plans to compete for members but added that if the agencies choose to leave CalPERS, it could result in a premium increase for remaining members of 1.8% to 5.5%. "CalPERS should absolutely be worried," McKinley said (Orange County Register, 6/18).