CalPERS Adjusts Health Premium Rates

On June 16, 2010, the governing board of California Public Employees' Retirement System (CalPERS), the nation's largest public employee pension fund, approved significant rate hikes for health plan premiums. Aside from the federal government, CalPERS is the nation's largest public purchaser of health care. 

Contract negotiations between California, which faces a $20 billion shortfall in the coming fiscal year, and state worker labor groups, already hit by furloughs under the state cost-saving plan, will determine the percentage of the increase for which CalPERS members will be responsible.  Tony Oliveira, the interim chairman of CalPERS Health Benefits Committee, reported that the fund negotiated the "best rates" it could in the current market. He said, "[m]any employees anticipate double digit premium increases in 2011 because of the increased costs charged by hospitals, medical providers, and for prescription drugs. The pressure comes mainly from provider costs . . . " 

The CalPERS press release is available here.