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X HEALTH CARE PREMIUMS - RUMORED TO RISE AGAIN BY 20 - 30%. BE A VOICE AT THE NEXT CAPERS HEALTH BENEFITS COMMITTEE HEARING MARCH 18m, SACRAMENTO Save the Date If your city contracts with CaiPERS health, you are encouraged to attend the PERS Health Committee meeting on March 18 at the CalPERS Building at 400 P Street in Sacramento. It is a chance for the Board to hear your concerns with premium hikes, which are rumored to rise again this year by as much as 20 to 30% without any changes in plan design or other changes. PERS continues to struggle with the nation- wide health plan cost increases. However, added to this dilemma is a split among the PERS Board as to what to do to ease the cost increases, especially in light of the horrendous State budget deficits. PERS staff has developed conceptual ideas for change, but none of these proposals will have any significant impact on the premium costs for 2004. In addition, representatives of public agencies have expressed to the PERS Board that their actions this year will send a message to its public agencies whether they should stay in the program or leave to form other pools or health plan arrangements. The Board at its January offsite session was told that the demographics of the public agencies are a positive asset to the overall program. If the public agencies left PERS, it would have a negative financial impact upon the rest of the plan, which includes State employees. PERS staff has been directed to seek input form public agencies and agendize those re- sponses for its March 18` Health Benefits Com- mittee meeting. There has been one meeting of public agency representatives where a number of issues were discussed. Public agency perspec- tives include the following: 2. Alternative Plans: within the self- funded plans, create alternative plan(s) with different deductibles/co -pays. Consider also offering a consumer driven option within the self- funded program. 3. HMO's: If in the near future, the traditional HMO's (exclusive of Kaiser) may no longer func- tion as "managed care° programs. If that occurs, consider eliminating them and then offering an Exclusive Point of Service (EPO) or Point of Service (POSY option under the self- funded program. 4. Consider Regional Rating: This has both positive and negative implications to the program, but it should at least be explored. 5. Public Agency Contribution for Retir" ees: Leave this up to the local public agencies to negotiate at the local level, do not create restric- tions or mandates. 6. Treat Public Agencies as Equal Part- ners: Unfortunately, almost everything done in the administration of the program focuses on "State" issues. Public agencies are usually ignored and/or consulted after the fact. 7. Termination Clause: allow public agen- cies 90 days after the Board adopts the premium costs and plan changes for all the plans to file a notice to leave the PEMHCA program. 1. Separate Public Agency Pool (within PEMHCA): this would allow for possible changes in the programs without public agencies being grouped with the State employee /retiree issues that have hindered changes in the past. PAGE 4 /PRIORITY FOCUS Visit the League's Official Web Site• - www.cacities.org