CalPERS Approves Patient Payment Hikes
"In an aggressive attempt to ward off insolvency and shore up the reserves of its two self-insured health plans," the health benefits committee of the California Public Employees' Retirement System on Dec. 13 approved a package that will increase patient co-payments and deductibles in 2001, the Sacramento Bee reports. The changes, which will take effect Feb. 1, are intended to save the two plans -- PERS Care and PERS Choice -- $78.7 million in the next year. The plans are expected to lose "nearly $100 million" this year (Rapaport, Sacramento Bee, 12/13). The approved changes to the plans closely follow the original proposals announced earlier this week:
- Doubling annual deductibles to $500 per person with a $1,000 per family maximum, for a savings of $19 million;
- Charging $20 co-payments for doctor visits, up from $10, which would save $7 million;
- Charging $50 emergency room co-payments, saving $2.3 million;
- Charging $250 per hospital inpatient admission for PERS Care Basic plan members, saving $ 1.3 million; and
- Implementing a new co-pay schedule for prescription drugs, for a possible savings of between $16.1 and $38.2 million ( Sacramento Bee, 12/11).
While "several state employee unions" objected to the plan and "urged" the state to put more money into the program, analysts said that given the rising costs of health care, CalPERS had "little choice" but to implement the proposals. "If the cost of health insurance is going up, you can either pass that on across the board or you can change the benefit design so that people who use the office visits or drugs will have a co-pay," Allan Baumgarten, an independent health care policy researcher based in Minnesota, said, adding, "So you have to choose to spread the costs across everybody or target people who have more frequent use." A CalPERS analysis has found that members of the self-insured plans tend to stay in hospitals longer, "rely more heavily on drug and doctor visits and choose more expensive" providers than enrollees in "comparable commercial groups in California." Allen Feezor, assistant executive officer for CalPERS' health benefits branch, called the new plan a "critical first step towards recuperation." According to the Bee, over the next two to three years, CalPERS "has to rebuild its reserves to a prudent level by generating an additional $100 million, or enough money to cover about three months' worth of claims" (Sacramento Bee, 12/13).