Changes at California’s pension giant will force more than 14,000 CalPERS members and their dependents in the Sacramento region and Bay Area to find a new health plan over the coming year.
The California Public Employees’ Retirement System recently negotiated its lowest premium increases in the past 21 years, which will mean lowered health premiums for 800,000 members in 2019.
As a result of the changes, CalPERS will part ways with two major providers — Health Net and Blue Shield — in some areas.
Health Net, a health plan managing care for Medicare and Medi-Cal populations, will no longer be available to CalPERS members in Sacramento, Yolo, Placer and El Dorado counties.
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The departure will affect an estimated 1,580 active and 308 retired CalPERS members and their dependents, according to CalPERS spokeswoman Stephanie Buck, who attributes Health Net’s service area change to its inability to “maintain viable rates in this region.”
Health Net representative Mashi Nyssen was unable to provide any information or explanation regarding the exit aside from a short statement that acknowledged the health plan will not be offered to CalPERS members in the region.
Those affected must choose another health plan during open enrollment, from Sept. 10 to Oct. 5, or they will default to UnitedHealthcare.
Blue Shield will no longer serve CalPERS in eight Bay Area counties: Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara, Solano and Sonoma. CalPERS members with Blue Shield plans in these counties must choose a new health care plan or be defaulted to Health Net SmartCare.
Blue Shield’s Access+ HMO plans will still be available to CalPERS members in 30 counties.
Buck said 9,908 active and 2,231 retired CalPERS members and their dependents will be affected by the San Francisco-based health insurer’s exit from CalPERS in these Bay Area counties. Blue Shield currently contracts with 314 medical groups in these counties.
Continuity of care
These service area changes might mean affected CalPERS members and their families need to find a new doctor.
“The medical groups and hospitals members will have access to could change depending on their choice of health plan,” Buck said. “Members can call the doctor’s office and ask if they are affiliated with the health plan and the hospital they prefer to use. They may also contact the health plans directly.”
The state maintains guidelines to ensure that individuals whose health plans have been terminated receive continuity of care.
“Continuity of care is available if you get your health plan from your employer, your employer stops offering that plan and you have to change to a plan that does not have your treating doctor or hospital,” according to the Department of Managed Health Care website.
Individuals who believe continuity of care applies to them should contact their health plan. If dissatisfied by their plan’s response, the health care department can be contacted for assistance at 1-888-466-2219 or www.HealthHelp.ca.gov, according to Ashley Robinson, a spokeswoman with the Department of Managed Health Care.
Finding a new plan
To help members find a new health plan, CalPERS has made the “Find a Medical Plan” tool available on its website. Customer service representatives are also available to answer questions.
“Members can expect the same benefits and co-payment amounts under Health Net’s SmartCare plan as they receive from Blue Shield’s Access+ plan,” Buck said. “The primary differences between most of the HMO (health maintenance organization) plans offered through CalPERS is a plan’s network of providers.”
The window to enroll in a self-selected health plan will be less than a month long — from Sept. 10 to Oct. 5. Buck said the relatively short period is a standard time frame.
“A contained Open Enrollment period helps health care purchasers determine a relatively fixed risk pool — population of healthy and sick individuals — for the following year, which helps predict and keep costs low,” Buck said.
Reasons for the changes
A statement provided by Blue Shield attributes its exit from the eight Bay Area counties to changes in the “risk adjustment process approved by the CalPERS board this year” and internal efforts “to manage the resulting impact on CalPERS member premiums.”
Blue Shield spokeswoman Amanda Wardell declined to provide any clarification beyond the statement regarding the insurer’s exit.
CalPERS approved Blue Shield’s request to exit the eight counties during an annual evaluation of medical providers, although the agency will maintain other agreements with Blue Shield.
“Blue Shield was not the only plan that struggled with the cost of care reflecting the price within the Bay Area region,” Buck said. “UnitedHealthcare also exited the region for contracting agencies and schools, and some other plans in the region had premium increases.” Contracting agencies are the employers that go through CalPERS for their health plans.
Only CalPERS members employed by contracting public agencies and schools in the Bay Area and Northern regions, not including Sacramento, will be affected by UnitedHealthcare’s service area changes, according to Buck. No state or CSU employees will be affected.
Total insureds affected
Service area changes from Blue Shield and Health Net will affect just over 14,000 CalPERS members, but that number does not account for the total insured people, including the dependents of CalPERS members. Asked about the total number affected, Health Net declined to comment and Blue Shield deferred to CalPERS, which then deferred to Blue Shield.
Buck did, however, report that a total of 135,417 letters were sent to inform members of the changes to health plans for the 2019 plan year. The agency sent a series of letters in July to affected members, informing them they would need to choose a new health plan.
It appears the insurers have not made efforts to notify affected people, but according to Robinson of the Department of Managed Health Care, health plans are required to do so only in the case of a product or a full market withdrawal.
Wardell from Blue Shield would not say whether the health plan had notified affected members but did say CalPERS is communicating the change to its members.
“We have received zero written notice from the insurer,” said David Lerman, who currently has insurance coverage with Blue Shield through CalPERS, in a complaint he filed with the Department of Managed Healthcare and shared with The Bee. “We want to keep our insurance and our doctors. ...We have not received any explanations of any reasons for this harsh decision which endangers our health.”
Richard Angeloni, a spokesman for the independent physician association Brown & Toland, was not aware of Blue Shield’s planned exit. The association negotiates contracts on behalf of its network of providers in the Bay Area used by health plans including Blue Shield.
He confirmed its doctors take care of CalPERS Blue Shield patients in both San Francisco and the East Bay.
Robinson said the Department of Managed Health Care has not received information from Blue Shield, Health Net or UnitedHealthcare about service area changes.
Entering and exiting
Health plans entering and leaving areas is not unusual.
“CalPERS health plans contract with a network of providers, and each year CalPERS and its contracted health plans re-evaluate these networks,” Buck said. “Depending on a variety of factors, not least of which is cost, providers ask that their coverage areas change for certain plans.”
The agency decides whether to grant the request by determining the burden a change in coverage will place on its members.
“It’s one way CalPERS helps contain costs for members,” Buck said.
Average premium increases for CalPERS members for 2019 are below the national average.
“CalPERS brings many health providers to the table, which creates competitive pricing,” Buck said. “Its governing body (and) the Board of Administration urges both CalPERS and health providers to maximize cost savings for members.”