CalPERS rejects copays, but at a cost
CalPERS Rejects Co-Pay Increase
By Marc Lifsher
Los Angeles Times
June 21, 2006
A California Public Employees’ Retirement System committee on Tuesday rejected a proposal to increase healthcare co-payments for more than one million members.
Facing solid opposition from powerful public employee unions, the CalPERS health benefits committee turned down all staff proposals to hike co-payments for visits to doctors, emergency rooms, outpatient surgical centers and hospital stays.
As a result, the CalPERS committee was forced to approve rate increases of 11.6% for health maintenance organization participants and 12.9% for members who opt for preferred provider networks.
Most of the increase — 80% in the case of state workers — will be picked up by state and local government employers and ultimately taxpayers, based on collective bargaining agreements between state and public employee unions. The rest is paid by employees through higher payroll deductions.
The decision against increasing co-payments shows how CalPERS, the nation’s largest public pension fund, is subject to far greater political and union pressures than many private sector employers that have been more aggressive in forcing workers to pay a higher proportion of rising health benefit costs.
http://www.latimes.com/business/la-fi-calpers21jun21,1,2411053.story
Comments: The CalPERS health benefits committee is to be commended for accepting the union position that shifting more costs to patients in the form of copays is unacceptable because of its negative impact on access and outcomes. Erecting financial barriers to care is a potentially injurious method of controlling costs.
The unfortunate dilemma faced by CalPERS is that it must pay higher, much higher, premiums for health insurance because it is no longer able to control health care spending by methods other than making care unaffordable for precisely those individuals with needs.
The actual excessive cost drivers include non-beneficial high-tech excesses, profound administrative inefficiencies, high prices, and the lack of an adequate primary care infrastructure. The ineffectual, fragmented system of private insurers sit between CalPERS and the health care delivery system, effectively blocking reform efforts. Limited price moderation is about the only impact they can claim, but even that results in higher prices for others through cost shifting, especially for the uninsured.
The useless and wasteful middlemen, the private insurers, need to be eliminated. Also there are reasons that we should not fragment the representation of patients through organizations such as CalPERS for public employees and Pacific Business Group on Health for a portion of private industry employees. We need only one agency, our own, with a publicly-administered and publicly-funded universal risk pool. We need a single payer system.