Premiums are expected to rise by an average of about 7% for CalPERS health insurance policyholders next year, with two popular PPOs up more than 14%, according to preliminary prices published online Tuesday by the pension system.
The California Public Employees Retirement System provides health insurance to approximately 1.5 million people, including approximately 750,000 local and state public employees and retirees and approximately 770,000 dependents.
The system introduced changes two years ago that increased PPO premiums while lowering costs for two expensive plans with the richest benefits. The changes are aimed at preserving top-tier plans and stabilizing prices over the long term.
The plans that will increase in price are PPO PERS Gold and PPO Platinum. Together they cover approximately 278,000 people.
PERS Gold, covering around 124,000, is expected to increase its price by 17.8%, reaching
PERS Platinum, covering approximately 153,000, is expected to increase by 14.5%, for
By far the most popular plan offered by CalPERS is a Kaiser Permanente HMO that covers approximately 556,000 people. The Kaiser HMO is expected to grow by around 6% next year, reaching around
Preliminary rates posted online are subject to further negotiation and may change slightly before being approved by the CalPERS Board of Directors next month.
Two years ago, CalPERS’ board approved a new pricing methodology on the recommendation of its health insurance experts, who said the system needed to make changes to save three of its top plans.
These projects –
This pattern, known as the “death spiral”, would have made the plans unsustainable, experts told the council two years ago.
So the board has adopted a structure that, in simplified terms, essentially transfers money from low health risk plans to higher risk ones. Consequently, the prices of
The plans formerly known as PERS Select, PERS Choice and PERS Care have been combined into two plans, the Gold and Platinum plans, which according to the new methodology are expected to stabilize from 2024.
CalPERS also offers Medicare Advantage policies and Medicare Supplemental Plans for those who are eligible.
The offerings include Medicare supplement plans called PERS Gold and PERS Platinum that cover about 150,000 seniors. Gold plan premiums increase by 4% and Platinum premiums by approximately 10%.
Other popular health insurance plans will increase by a few percentage points or be reduced. A
Open enrollment, during which policyholders can switch plans, will run from
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