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8A Page 20 CalPERS Evaluates New Health Plan Design Options with Cost-Sharing In Mind On May 29, members of the Health Benefits Committee of the CalPERS board continued to evaluate new health plan design options in an effort to keep premiums as low as possible. This discussion happened a few weeks after Gov. Arnold Schwarzenegger released the May budget revise. The Governor, to save $132 million. proposed having the state negotiate and contract directly with health care providers instead of through CaIPERS. While CalPERS hasn't released any details as to what it's considering, members of the Health Benefits Committee contend that CalPERS' goal is to "balance the members' need for low premiums with an opportunity for each member to have meaningful benefit choices." Labor groups attending the meeting raised a number of concerns including the issue of adverse selection or the pattem in the health care industry where individuals choose their health care plan options based on their own assumed risk of getting ill. Those who see themselves using their plan more may choose a more substantial plan, whereas individuals that assume they are less likely to become sick may choose a less substantial plan. According to labor. by isolating individuals that are more likely to use their health plan at a higher rate you may inadvertently make the cost of those plans rise. but only on those the individuals that utilize their plan more and this can cause a disparity. CalPERS is considering a number of plan design options which would decrease monthly premiums through increased cost-sharing in the form of higher co-pays and out-of-pocket maximums. The new plan offering will consider cost-sharing in office visits, hospital inpatient and outpatient services, emergency room services, generic and brandwname prescription drugs, and out-of~pocket maximums. labor representatives asked the committee to think about this as a cost-shift option from employer to employee not a cost-sharing option. Regardless of whether CalPERS' health care plan designs are going to be seen as a cost-shift or cost-sharing, health care costs continue to rise and public employers are bearing the brunt. Employer groups have argued that with city revenues declining, the Governor's threat to raid city coffers, and the enormous cost of health care-something has to be done. CalPERS will be scheduling stakeholder meetings to discuss this concept. league staff will continue to keep members informed. Please contact Natasha Karl, legislative analyst, with any questions at nkarl@cacities.orQ. Find a Bill, Legislators, Leg Committee, or Ask League Leg Staff Visit (and bookmark!) the League's LeQislative Resources Web page (www.cacities.orallearesources). You'll find a roster and contact information for the League's legislative staff; the online Bill Search program, background materials on lobbying your legislators, and more. Upcoming Events June The American Recovery and Reinvestment Act of 2009: Capital Fund Recovery Competition Grants. The federal Department of Housing and Urban Development (HUD) will begin accepting applications from publiC housing authorities for $1 billion available from this program. Applications for grants in the Energy Efficiency category are due by July 21. Applications for the other three categories are due by Aug. 18. (For 12