NU Online News Service, May 15, 2003, 11:23 a.m. EDT – The California Public Employees’ Retirement System says it may develop dental plans, vision plans and other new benefit plans in an effort to keep local governments in its health benefits purchasing program.

CalPERS is also trying to hold down its skyrocketing health maintenance organization rates by negotiating multi-year HMO contracts. CalPERS may negotiate a multi-year HMO contract with Blue Shield of California, San Francisco, that will start in 2004, CalPERS says.

CalPERS will require participating health plans to offer aggressive programs for managing the cost of chronic conditions, and it may back way from its tradition of offering the same rates for health coverage throughout the state. CalPERS is not yet shifting to regional pricing, but the CalPERS board will ask state lawmakers to give it the authority to do so, CalPERS says.

CalPERS, which has 1.2 million benefit plan members, runs benefit plans for most California state employees and retirees. The state’s local and regional government employers can join the program on a voluntary basis.

Local governments once flocked to join CalPERS because of its success at holding down rates and offering a long menu of health plan choices. But rates have been skyrocketing in recent years. Local governments, especially those in relatively low-cost regions of the state, have been leaving the system in recent years because of the rate increases, CalPERS says.