Price hikes proceed for CalPERS medical health insurance under plan to avoid “death spiral” [The Sacramento Bee] – InsuranceNewsNet

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Premiums are projected to grow a mean of about 7% for CalPERS medical health insurance policyholders next yr, with two popular PPOs spiking by greater than 14%, in line with preliminary prices posted online Tuesday by the retirement system.

The California Public Employees’ Retirement System provides medical health insurance for about 1.5 million people, including roughly 750,000 state and native public employees and retirees and about 770,000 dependents.

The system introduced changes two years ago that boosted PPO premiums while lowering costs for 2 expensive plans with the richest advantages. The changes are geared toward preserving the top-tier plans and stabilizing prices over the long run.

The plans that can go up in price are the PERS Gold and PERS Platinum PPOs. Together they cover about 278,000 people.

PERS Gold, covering about 124,000, is projected to extend in price by 17.8%, reaching $766 monthly for a person starting Jan. 1, in line with preliminary figures.

PERS Platinum, covering about 153,000, is projected to go up 14.5%, to $1,084 monthly next yr, in line with the figures.

The most well-liked plan by far that CalPERS offers is a Kaiser Permanente HMO that covers about 556,000 people. The Kaiser HMO is slated to go up about 6% next yr, reaching about $853 monthly.

The preliminary rates posted online are subject to further negotiation, and will change barely before they’re approved by the CalPERS Board of Administration next month. California pays about $650 monthly toward individual state staff’ plans, and offers an extra $260 medical health insurance stipend to members of SEIU Local 1000.

Two years ago, the CalPERS board approved a latest rate-setting methodology on the advice of its medical health insurance experts, who said the system needed to make changes to avoid wasting three of its best plans.

Those plans — Anthem Traditional HMO, Blue Shield Access+ and a plan formerly often known as PERS Care — attract individuals who spend essentially the most on medical treatment. Insurers kept raising their premiums to cover large bills, driving healthy people away and prompting more price hikes.

That pattern, often known as a “death spiral,” would have made the plans unsustainable, experts told the board two years ago.

So the board adopted a structure that, in oversimplified terms, essentially shifts money from plans with lower health risk to those with higher risk. Consequently, the costs for the Anthem and Blue Shield plans are projected to go down by nearly 7% each next yr, in a second yr of price drops.

Plans formerly often known as PERS Select, PERS Selection and PERS Care were combined into two plans, the Gold and Platinum plans, which under the brand new methodology are alleged to level off in price starting in 2024.

CalPERS also offers Medicare Advantage policies for individuals who qualify.

Included within the Medicare Advantage plans are PERS Gold and PERS Silver plans that cover about 150,000 seniors. The Gold plan premiums are going up 4% and the Platinum premiums are going up about 10%.

Other popular Medicare plans will go up by a pair percentage points or be reduced. A Kaiser Permanente Senior Advantage policy covering about 111,000 seniors will drop in price by about 6.4%.

Open enrollment, during which policyholders may switch plans, will run from Sept. 19 to Oct. 14.

©2022 The Sacramento Bee. Visit sacbee.com. Distributed by Tribune Content Agency, LLC.

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