CalPERS near a co-pay hike
Sacramento Bee 5/16/07
The changes will shave more than $59 million off premiums that the California Public Employees' Retirement System will charge state and local government employers in 2008. The board plans to set next year's rate increases in June.
CalPERS trustees, who oversee the nation's third largest purchaser of health care, will consider the panel's benefit recommendations today
During a three-hour hearing Tuesday, the board's Health Benefits Committee rejected calls by labor and employee organizations to oppose the first increase in co-payments in five years.
The panel also rebuffed pleas by public agencies to retain Blue Shield's health maintenance organization coverage for 9,100 workers and retirees living in El Dorado, Napa, Plumas and Lake counties. Blue Shield says these counties are its most expensive regions to provide coverage.
"I'm really concerned we are not being given a chance to explore viable alternatives. If CalPERS begins to exit counties ... will it be able to maintain its bargaining power?" Dave Warren, finance director for the city of Placerville, asked trustees.
CalPERS officials estimate Blue Shield's withdrawal would cut premium costs by $30 million for the remaining 356,000 members in the health plan. Napa and El Dorado members can switch to a preferred provider organization plan or opt for HMO coverage from Kaiser Permanente or Western Health Advantage of Sacramento.
For rural residents, the pullout could mean changing doctors, longer drives for hospital and routine doctor's visits. Officials at Marshall Medical Center said it is too early to determine the financial impact on the Placerville hospital.
"I'm pretty upset by it," said Kelly Segura, an accounting supervisor with the city of Placerville. Sticking with a managed care plan will mean finding new doctors and traveling to Folsom or Sacramento for office visits and emergency room care.
The Garden Valley Fire Protection District near Coloma will consider leaving CalPERS and signing up with another health care provider.
"We have a contingency (plan)," said Fire Chief Ted Schmidt.
In another move to pare expenses, the committee backed a new low-cost physicians network for HMO and PPO members in 17 counties, including Sacramento, Yolo, Placer and part of El Dorado. The network would have fewer doctors than other plans, but it would offer members a price break. Annual savings would range from $2 million to $17 million.
Labor leaders urged trustees to drop the co-payment increases, arguing the higher out-of-pocket costs could keep members from taking necessary medications or certain medical treatment.
Marshall Hospital officials argued that Blue Shield has been unwilling to work out a plan to continue coverage in El Dorado County.
"We're a tiny hospital up in Placerville. We don't have any clout. You're going to have to take a much more active role to keep Blue Shield accountable," said T Abraham of Marshall.
Trustee Tony Oliveira, a Kings County supervisor, said CalPERS needs to control costs or risk exodus of public agencies from the fund's health program.
"Premiums are rising. I don't think we can sit back," Oliveira said. "This is a time for the board to show some courage."
Fee changes
A key committee is urging the board of the California Public Employees' Retirement System to make these rate changes:
• Raise the co-payment for doctor visits to $15 from $10, which is the same fee paid by workers at private companies in the state. Fees for preventive care such as annual physicals would be waived.
• Increase the co-payments for brand-name prescriptions by $5, putting the total fee at $20 for a 30-day supply from a retail drugstore. A 90-day mail-order supply increases to $40 from $25. The co-payment for generic drugs would stay at $5 for retail and $10 for mail order -- aimed at getting more members to try generics.
• Set the standard urgent care co-payment at $15. Currently, Blue Shield's fee is $25; Kaiser's, $10; and Western Health Advantage, $20. For the PERS Choice basic PPO plan, the co-payment remains at $20.
• Set standard out-of-pocket maximums for HMO members at $1,500 for individuals and $3,000 families. The cap excludes the cost for prescription drugs.