CalPERS panel OKs new health premiums; 3.7 and 5.3 percent for Blue Shield - Kaiser's expected to be much higher.
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Byline: Victoria Colliver; Chronicle Staff Writer
Members of the California Public Employees' Retirement System could see increases of 3.7 percent and 5.3 percent for health benefits premiums next year if they are covered by Blue Shield. But Kaiser Permanente's increases are expected to be significantly higher, at 8.2 percent.
CalPERS' health committee approved on Wednesday the changes to its 2009 program, which covers 1.2 million members. The full board is expected to vote on the recommendation today.
CalPERS health benefits premium increases are closely watched because the giant state pension fund is considered
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CalPERS health benefits committee members were frustrated with Kaiser, accusing the health maintenance organization of refusing to budge from the original bid submitted months earlier.
"We are approving the Kaiser rate under protest," Priya Mathur, the committee's chairwoman, said in a statement. "We need to get to a new day where Kaiser truly partners with us, taking our size and our claims experience as the barometer for rates instead of general cost trends."
Kaiser spokeswoman Kathleen McKenna said Kaiser does take in consideration how much CalPERS uses its services when setting rates.
Blue Shield rates came in relatively low because of a rollover credit from the insurer for less-than-anticipated use of hospitals and doctors by its members in 2007 and 2008.
Under the committee's recommendations, the monthly premium for a family using Blue Shield's "NetValue" HMO would be $1,161, a 3.7 percent increase over the previous year. Kaiser's family premium next year would be $1,227 a month.
CalPERS' HMO premium increases have ranged from a high of 18 percent in 2004 to 7.4 percent this year. The average increase for 2009 had not been calculated, but was estimated at around 6.6 percent.
Last month, the CalPERS board voted to decrease premiums for preferred-provider organization plans by 3 percent, affecting about 4,300 members. An additional 315,000 members will see no increased premiums for their PPO plans.
CalPERS' health benefits increases are still lower than national trends. A PriceWaterhouseCoopers study released earlier this week found employer-paid health costs rose nearly 10 percent in 2008, and expected a similar increase next year.
HMO premium increases
CalPERS' HMO premium increases have ranged from a high of 18 percent in 2004 to 7.4 percent this year.
200418.0%
200511.4
20068.7
200711.6
20087.4
2009*6.6
*estimated
Source: California Public Employees' Retirement System
"We need ... Kaiser (to take) our size and our claims experience as the barometer for rates."