2014 health care rates are recommended to CalPERS board

More health plans will expand choices for members and families

The California Public Employees’ Retirement System’s (CalPERS) Pension and Health Benefits Committee (PHBC) June 18 recommended the Board of Administration approve a 2014 health care package that would raise overall premiums next year by an average of 3 percent for the Pension Fund’s nearly 1.3 million health program members, the lowest average increase since 1998. The rate is lower than the 9.6 percent increase in 2013. If the full Board approves the new premium rates, they will take effect January 1, 2014.

“Requirements of the federal Affordable Care Act accounted for about 2 percent of the 2014 premium rate increases,” said Dr. George Diehr, Vice Chair of the PHBC. “However, the lower rates most members will see next year are the result of successful rate negotiations with existing and new health plan providers that incorporated the underlying premise of CalPERS health initiatives: providing quality health care to our members at the lowest possible cost.”

The recommended rate package will increase Basic HMO plan coverage by 3.8 percent, PPO plans by 2.5 percent and Association plans by 6 percent. Medicare HMO plans will increase about 5.8 percent, PPO plans will decrease 8.7 percent, and Association plans will increase 2.2 percent.

In 2014, members will be able to choose from multiple plans in most areas of the state. Anthem Blue Cross, Health Net, Sharp Health and United Healthcare join Blue Shield of California and Kaiser Permanente as HMO providers.

“The addition of new health plan providers will mean that there will be more quality health coverage options available than in prior years. We are also expanding our geographic areas covered to meet the needs of our members and their families,” said Ann Boynton, CalPERS Deputy Executive Officer for Benefit Programs Policy and Planning. “In certain geographic areas, we do see slightly higher rate increases because of the impact of regional pricing differences.”

The 2014 rates also reflect the implementation of risk adjustments across the HMO plans and across the PPO plans.

Anthem Blue Cross, Blue Shield of California, Kaiser Permanente and United Healthcare will provide plan coverage throughout most of California. Health Net will cover six counties in Southern California, while Sharp’s coverage will focus on San Diego County. Anthem Blue Cross will also continue to serve as the Third Party Administrator for CalPERS self-funded PPO health plans. All of the CalPERS health plan providers have five-year contracts that expire December 31, 2018.

CalPERS annual Open Enrollment period runs September 16 - October 11.

Please see the chart below for premium changes by plan type. See the links below for proposed detailed rate information.

CalPERS 2013-14 Health Plan Premium Rate Increases

Basic Plans
Plan Product & Type 2014* 2013*
Overall 3.7% 9.6%
HMOs 3.8% 8.7%
PPOs 2.5% 13.9%
Associations 6.0% 3.7%

*Premium changes for public agencies vary depending on geographic location.

Medicare Plans
Plan Product & Type 2014* 2013*
Overall -2.0% -10.5%
HMOs 5.8% -5.5%
PPOs -8.7% -14.7%
Associations 2.2% -0.15%

*Premium changes for public agencies vary depending on geographic location.

CalPERS is the nation’s largest public pension fund with approximately $260 billion in assets, providing retirement benefits to more than 1.6 million State, public school, and local public agency employees, retirees, and their families on behalf of more than 3,000 employers in the state, and health benefits to more than 1.3 million members. For more information about CalPERS, visit www.calpers.ca.gov.

“Requirements of the federal Affordable Care Act accounted for about 2 percent of the 2014 premium rate increases,” said Dr. George Diehr, Vice Chair of the PHBC. “However, the lower rates most members will see next year are the result of successful rate negotiations with existing and new health plan providers that incorporated the underlying premise of CalPERS health initiatives: providing quality health care to our members at the lowest possible cost.”

The recommended rate package will increase Basic HMO plan coverage by 3.8 percent, PPO plans by 2.5 percent and Association plans by 6 percent. Medicare HMO plans will increase about 5.8 percent, PPO plans will decrease 8.7 percent, and Association plans will increase 2.2 percent.

In 2014, members will be able to choose from multiple plans in most areas of the state. Anthem Blue Cross, Health Net, Sharp Health and United Healthcare join Blue Shield of California and Kaiser Permanente as HMO providers.

“The addition of new health plan providers will mean that there will be more quality health coverage options available than in prior years. We are also expanding our geographic areas covered to meet the needs of our members and their families,” said Ann Boynton, CalPERS Deputy Executive Officer for Benefit Programs Policy and Planning. “In certain geographic areas, we do see slightly higher rate increases because of the impact of regional pricing differences.”

The 2014 rates also reflect the implementation of risk adjustments across the HMO plans and across the PPO plans.

Anthem Blue Cross, Blue Shield of California, Kaiser Permanente and United Healthcare will provide plan coverage throughout most of California. Health Net will cover six counties in Southern California, while Sharp’s coverage will focus on San Diego County. Anthem Blue Cross will also continue to serve as the Third Party Administrator for CalPERS self-funded PPO health plans. All of the CalPERS health plan providers have five-year contracts that expire December 31, 2018.

CalPERS annual Open Enrollment period runs September 16 - October 11.

Please see the chart below for premium changes by plan type. See the links below for proposed detailed rate information.

CalPERS 2013-14 Health Plan Premium Rate Increases

*Premium changes for public agencies vary depending on geographic location.

*Premium changes for public agencies vary depending on geographic location.

CalPERS is the nation’s largest public pension fund with approximately $260 billion in assets, providing retirement benefits to more than 1.6 million State, public school, and local public agency employees, retirees, and their families on behalf of more than 3,000 employers in the state, and health benefits to more than 1.3 million members. For more information about CalPERS, visit www.calpers.ca.gov.