PBGH: Follows on CalPERS’ Rate Increase Heels with 10% Hike
In yet "another sign" of returning double-digit inflation, the San Francisco-based Pacific Business Group on Health (PBGH) announced yesterday it was unable to hold out against demands or premium hikes by the 11 health plans with which it contracts. As a result, the group's 21 participating companies can expect to see a 10% increase in premiums next year. Claire Carter, the head of the business group's negotiating alliance, said, "We are disappointed with this cost spike. We'd love to know what we could do about it. We feel like we don't have a choice but to accept it for the year 2000." PBGH, one of the first business coalitions formed this decade in an attempt to gain negotiating clout over HMOs, has an outstanding track record in holding down premiums. In fact, the Sacramento Bee reports, the group held costs to a net 5% increase between 1995 and 1999. Depending upon how much of the hike the 21 participating employers pass along, their 400,000 employees could see significant personal increases next year. In anticipation, some of the companies are encouraging employees to switch to "high- value" plans. Wells Fargo & Co. said it recently concluded an early open enrollment period in which about 2,000 employees switched to more cost-effective plans without having to switch physicians (Slater, Sacramento Bee, 7/2).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.