NU Online News Service, April 17, 10:49 a.m. – The Health Benefits Committee at the California Public Employees’ Retirement System, says it had a terrible time putting together a decent health benefits package for 2003.
CalPERS provides major medical coverage and Medicare supplement coverage for 1.2 million public employees, dependents and retirees. It has long been famous for offering members rich benefits and long menus of coverage choices at a reasonable cost.
But the committee is now recommending that CalPERS hold down cost increases by reducing the number of health maintenance organizations to five in 2003, from seven this year.
Even with the cuts in coverage options, the average HMO rate increase will still be 25%, the CalPERS health committee warns.
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Rates for the two self-insured preferred provider plans will go up 22% and 19%, the committee says.
The CalPERS Board of Administration will consider the health committee’s recommendations today.
The CalPERS health committee says managed care companies seemed far more intent this year on reaching target profit margins than on keeping CalPERS members.
“This is the toughest market environment we’ve ever faced,” Rob Feckner, chair of the health committee, says in a statement accompanying the announcement of the rate increases. “The HMOs gave little ground in rate negotiations.”