CalPERS hikes HMO premiums 25 percent - Industry Scan - Brief Article

Healthcare Financial Management, June, 2002

Sacramento, California-based CalPERS, the largest purchaser of public employee health benefits in California and the second largest in the nation after the Federal government, has approved a 2003 healthcare package that includes a record rate increase of 25.1 percent for HMOs and rate increases of 22.1 and 1 8.9 percent for its two self-funded PPOs. The premium increase for HMOs is the largest since 1990-91, when rates rose by 1 7.9 percent. Beginning on January 1, 2003, the current lineup of seven HMOs will be reduced to five.

CalPERS also is assessing a new strategic plan to be phased in as early as 2004. Members and employers would be offered a choice of HMO-type health benefit plans, PPOs, Medicare supplement plans, and other products regardless of where they live in California. The new program could involve two or three fully insured health vendors or one self-funded plan operating with one or more third-party administrators. Standard benefit designs would be required for each product.