CalPERS weighs price hikes of up to $270 for cheaper health plans to save its best offerings
Prices for some of the cheapest health insurance plans California state workers can buy would increase by up to $270 per month under a CalPERS proposal to stabilize rates.
The price hikes for the cheapest plans, typically favored by young and healthy workers, would help save richer plans favored by older workers and retirees from collapse, a CalPERS health insurance official has told the retirement system’s board.
The California Public Employees’ Retirement System posted projected rates online this week ahead of an anticipated decision Tuesday on whether to adopt the stabilization proposal in 2022. Rates for 2021 are not affected.
The plans that would see the biggest increases are PERS Select and Anthem Select. Prices for Blue Shield Trio would also go up. The plans have narrower networks of doctors and hospitals and less generous benefits than more expensive plans. At $527 per month next year, PERS Select is the second-cheapest plan CalPERS offers, after narrow-network plan Health Net Salud y Mas, which is focused on Latinos.
Prices would go down in 2022 for Anthem Traditional HMO, Blue Shield Access+ and PERS Care, more expensive plans with the best benefits and networks.
Health Plan Research and Administration Division Chief Marta Green told the CalPERS board in September that those three plans had entered into “death spirals” that would make them infeasible to operate over time.
The plans started to enter the spirals two years ago, after CalPERS ended a complicated risk adjustment program. Prices went up for the better plans, and as a result, members migrated to cheaper plans. That sent prices for the rich plans even higher, initiating the spirals.
Green’s proposal introduces a simpler risk adjustment program known as portfolio rating. The program essentially shifts money from plans with the least health risk to the plans with the highest risk.
The proposal, while causing big price swings initially, would align prices with quality and stabilize rates over time, Green has said. The proposal introduces the rate changes over two years, 2022 and 2023, instead of imposing them all at once next year.
The California Public Employees’ Retirement System provides health insurance to about 1.5 million people, including current and retired state workers, other public employees and their dependent family members.
Listed below are enrollment figures for the plans most affected by the proposal along with prices for next year and the following two years. State workers don’t pay the listed prices — they pay a portion spelled out in union agreements. For 2021 plans, the state is contributing $607 to $645 per month for most workers. Workers are responsible for the rest. SEIU Local 1000 members and state attorneys receive an additional $260 per month.
Anthem Traditional HMO
Nov. 2020 enrollment: 17,957
2021 premium: $1,220
2022: about $1,225
2023: about $1,100
Anthem Select
Nov. 2020 enrollment: 44,135
2021 premium: $801
2022: about $850
2023: about $1,050
Blue Shield Access+
Nov. 2020 enrollment: 88,299
2021 premium: $939
2022: about $950
2023: about $900
Blue Shield Trio
Nov. 2020 enrollment: 8,993
2021 premium: $723
2022: about $775
2023: about $815
PERS Care
Nov. 2020 enrollment: 93,062
2021 premium: $1,112
2022: $926
2023: $969
PERS Select
Nov. 2020 enrollment: 100,216
2021 premium: $527
2022: $763
2023: $797
This story was originally published November 11, 2020 at 4:55 AM.