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M % A CALPERS DECISION TO RAISE HEALTH INSURANCE PREMIUMS At its Wednesday meeting, the CalPERS board voted to increase health insurance premiums by an average of 18% for its basic plans. A long debate ensued regarding what, if any, copay increases to support. The Board finally decided to increase emergency care and prescription drug copays next year under HMO contracts. The hike would effectively double the out -of- pocket costs for medical coverage for many public — employees around the state. One of the nation's largest buyers of health care, CalPERS may now be facing a member revolt that could cripple or ultimately dissolve the organization. CalPERS has been struggling to balance its membership for several years now, as a younger workforce has widened a demographic rift in its membership. Disparate medical costs between Northern and Southern California have also con- tributed to the inner strife, and prompted some within the organization to ponder a regionally based rate package to appease its Southern California members. But, regional pricing is still off the table and will not likely be considered until September, 2003. Approved Copay Increases CalPERS will charge all HMO members $50 to go to the emergency room but will wave the fee if patients are later admitted to the hospital. Current ER fees are $25 for Blue Shield, $35 for Kaiser and $50 for Western Health Advantage. LEAGUE POSITION ON SB 196 SHIFTS FROM SPONSOR TO SUPPORT Until late this week, the League was the sponsor of SB 196, authored by Senator Sheila Kuehl. The League is now a strong supporter of the bill, but, as proposed to be amended, is no longer the sponsor. As originally introduced, SB 196 would clarify that the local government representatives appointed to the nine regional water quality control boards shall be a supervisor or mayor or council member. This provision would take effect at the next vacancy in the "associated with county govemmenY' or "associated with municipal govemmenY' categories on the regional boards. This week, the author, after exten- sive consultation with the League, accepted amend- ments proposed by the State Water Resources Control Board to reorganize the regional boards and reduce the membership from nine to seven posi- tions. Local government would still retain two mem- bers on the re- structured regional boards. They would be either a county supervisor, mayor or city council member. Like the language contained in the League - sponsored version of SB 196, this new language is a significant improvement over existing law, since for the first time it species that the local government members must actually be supervisors, mayors or city council members. In light of the broader changes to the regional board composition that the amendments propose, it is no longer appro- priate for the League to sponsor SB 196. Instead, the League will support the bill. Fees for medicines not on the HMO's pre - approved prescription list will also increase. The fees will increase to $45 for a 30 -day supply at the pharmacy and $75 for a 90 -day supply by mail. Members now pay $30 for retail and $45 for mail - order prescriptions. Defeated Copay Increases CalPERS staff had proposed a new $250 fee for hospital admissions, which could have de- creased 1.7 percent from Blue Shield's premium increase. In addition, recommendations also cen- tered on a new $100 fee for outpatient surgery, Continued on Page 7 The League thanks Senator Kuehl and her office for their commitment to work with the League before agreeing to accept the Water Board's proposed amendments. The League also thanks the State Water Resources Control Board for negotiating with the League in drafting their proposed amendments. SB 196 will be heard in the Assembly Water Parks and Wildlife Committee on July 1. Cities should continue to send letters of support to legislators. Questions? Contact League Legislative Repre- sentative Yvonne Hunter, email: huntervancacities.ora; telephone: 916.658.8242. PAGE 4 /PRIORITY FOCUS Visit the League's Official Web Site -- www.cacities.org