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HomeMy WebLinkAboutAgenda Report - August 4, 2004 I-04AGENDA ITEM 1 14 CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Discussion and appropriate action regarding Adoption of Resolution electing to withdraw from the CaIPERS Medical Program (Public Employee's Medical and Hospital Care Act) MEETING DATE: Wednesday, August 40, 2004 PREPARED BY: Risk Manager RECOMMENDED ACTION: That Council discuss and possibly adopt the attached Resolution of the Lodi City Council Electing to Cease to be Subject to the Public Employees' Medical and Hospital Care Act. BACKGROUND INFORMATION: Staff is recommending withdrawal of the City of Lodi from the CalPERS Medical Program primarily for the following reasons: • Elimination of Sutter Hospitals and providers' medical groups from the CalPERS Blue Shield Network for 2005 • Reduction in HMO health plans (from four to one) • Historical premium trend (Blue Shield: 2003-23%, 2004-18%, 2005-23.7%) • Institution of regional rating for 2005 • Annual premium increase for 2005 The City recently received medical insurance rate increases from CalPERS, which included an HMO increase of 23.71%. Most employees (84%) are members of this HMO. These increases present the City with additional expenditures for active City employees in calendar 2005 approximately $724,332 greater than 2004. A primary factor driving this increase is CalPERS' new practice of "regional rating". This drives rates up in northern California while lowering them in southern California. CaIPERS Medical Program members in the Los Angeles area will realize rate decreases of as much as 8.7%. The HMO premium increase for State employees will increase, but only by 11.4%, not the 23.71% facing northern California cities. The City's benefits broker, ABD Insurance & Financial Services, has located a possible alternative medical insurance provider; PacifiCare. After initial quotes were provided, PacifiCare subsequently reduced its rates for both active employees and retirees. As is currently available with CaIPERS, Kaiser would also be an optional carrier along with PacifiCare. Preliminary rate estimates have increased unexpectedly, but are not 100% final — the potential still exists they may come in lower. PacifiCare/ Kaiser's rates for active City employees in calendar 2005 represent additional expenditures in calendar 2005 approximately $353,970 greater than calendar 2004. This generates a savings of $370,362 when compared to the CaIPERS increase. The City Manager had conducted meetings with representatives of the City's various bargaining groups, active City employees, as well as retirees. At these meetings many questions were asked regarding the possible transition to a new h ealth carrier a nd answers were p rovided. A written FAQ s heet was e - mailed or U.S. post mailed to those who could not attend. The decision before Council today is not to definitively select a new medical carrier, but to decide on whether the City should leave the CalPERS Medical Program. A new carrier must be selected in the month of September. This communication was prepared prior to receiving word from all bargaining groups regarding their participation in the potential change. Preliminary feedback is that most would not object to a transition away from the CalPERS Medical Program. However, Council has reviewed the letter from Lodi Professional Firefighters stating they "believe it is in the best interest of the City, and their firefighters to stay with CalPERS medical plans." Staff has learned that since the City of Lodi entered the CalPERS Medical Program as one entity, if it chooses to leave, it must do so the same way -- as one entire entity. It is not possible for individual City of Lodi bargaining groups to remain in the program. As this communication is being written, meetings are being set up with Lodi Professional Firefighters to ascertain what their specific concerns are regarding this possible change, and whether PacifiCare or the City can address those concerns. There are no guarantees that future CalPERS rate increases will not continue to come in at unacceptable levels. Other northern California cities have left (Yuba City, Folsom) and are considering withdrawing from CalPERS. This will leave behind those that have difficulty finding alternative health carriers, e.g., cities that use medical services and facilities to a relatively high degree. This would only serve to make remaining northern California CalPERS Medical Program members the more expensive users of the system — creating further pressure to drive up rates. Concern has been expressed by City staff that PacifiCare rates could increase dramatically in future years. In a letter presented at the Council shirtsleeve 7127104, Heidi Duncan, Senior Business Manager for PacifiCare, does offer retention and health care cost trend guarantees relative to their 2006 rate. In no way do these guarantees assure the entire rate increase for 2006 will be capped, but specific components of it will be. The 2005 CalPERS rate increase will raise the annual medical bill for active employees to a level such that if CalPERS only raised their rates by 18% in 2006 (this was their increase in 2004), PacifiCare would have to raise their rates by 28% in order to reach an equivalent medical bill for the year. In other words, the City is money ahead if it transitions to PacifiCare and their increase in 2006 is any figure less than 28%. Given the City of Lodi must now make every effort toward reducing expenditures to bring them in line with revenues, and we have a savings of $370,362 available to us over calendar year 2005 (potentially from a program that provides benefits equivalent or superior to CalPERS) it is staffs recommendation the City withdraw from the CalPERS Medical Plan. In the next few weeks we will finalize procurement of a new medical carrier, and bring this back to Council for approval. Representatives from ABD and PacifiCare will be present at this Council meeting to answer any questions Council members may have. As a reminder, any decision by the City to withdraw from the CalPERS Medical Program requires adoption of a resolution to this effect by August 14th, 2004. FUNDING: Not Applicable 1. Evans Manager RESOLUTION NO. 2004- A RESOLUTION OF THE LODI CITY COUNCIL ELECTING TO CEASE TO BE SUBJECT TO THE PUBLIC EMPLOYEES' MEDICAL AND HOSPITAL CARE ACT DRAFT WHEREAS, Government Code Section 22938 provides that a local agency which has elected to be subject to the Public Employees' Medical and Hospital Care Act may cease to be so subject by proper application by the local agency; and WHEREAS, the City of Lodi, hereinafter referred to as Public Agency is a local agency which has elected to be subject to the provisions of the Act; NOW, THEREFORE, BE IT RESOLVED, that the Public Agency elect, and it does hereby elect, to cease to be subject to the provisions of the Act; and BE IT FURTHER RESOLVED, that coverage of the Act cease on December 31, 2004. Approved this 4d' day of August, 2004 LARRY D. HANSEN Mayor Attest: SUSAN J. BLACKSTON City Clerk State of California County of San Joaquin, ss. I hereby certify that Resolution No. 2004- was passed and adopted by the City Council of the City of Lodi in a regular meeting held August 4, 2004, by the following vote: AYES: COUNCIL MEMBERS — NOES; COUNCIL MEMBERS — ABSENT: COUNCIL MEMBERS — ABSTAIN: COUNCIL MEMBERS — SUSAN J. BLACKSTON City Clerk Approved as to Form: D. STEPHEN SCHWABAUER City Attorney I -q Jennifer Perrin From: Curt Juran Sent: Tuesday, August 03, 2004 3:42 PM To: Joanne Narloch Cc: Peter M. Iturraran; Chet Somera; Mark Zollo; Diana S. Gonzales; Greg Ramirez; City Council; Ann Areida-Hintz; Betsy Peterson; Buzz Fujitani; Charles Swimley; Cory Wadlow; Curt Juran; David Morimoto; Del Kerlin; Dennis Callahan; Frank R. Beeler; Gary Wiman; George M. Bradley; Hans Hansen (Lodi EUD); Jeanie Biskup; Joel Harris; Joseph Wood; Mark White; Maxine Cadwallader; Mel Grandi (Lodi EUD); Michael Reese; Odette (Lourdes Bondoc); Paula Fernandez; Rachel Sawyer; Rebecca Areida; Roy Todd; Ruby Paiste; Sharon Welch; Sondra Huff (Lodi EUD); Stacy Christy (Lodi EUD); Steve Dutra; Steve Mann; Susan Bjork; Tiffani Fink; Tom Alexander; Tyson; Wally Sandelin Subject: Discontinuation Of CialPERS Insurance The L.C.M,M.A. met on Monday, August 2, 2004, and discussed the options available to us regarding health insurance for 2005. The opinion of those in attendance last night is that we feel strongly that the City of nodi does need to save money in future years, but are concerned that money saved will be spent on new programs and/or construction projects. We feel that adding programs or the construction of new facilities would be contrary to any attempts to save money. The City is already short staffed and any new facilities would strain our employee resources even further. In addition, we are having to cut back on maintenance of the facilities and landscape we currently have. In what we feel is in the best interest of the City, the L.C.M.M.A. has agreed on changing insurance providers with the implementation of the amendment to our contract as spelled out in the attached letter. You will be receiving a signed copy of this letter in interoffice mail. Please feel free to contact me if have any questions about this. Curt Juran President LCMMA P.O. Sox 1010 Woodbridge, CA 95258 ph. (209) 333-6740 fax (209) 333-5506 email cjuran@lodi.gov E] Discontinue :a [PEPS inrO.doc (.. PRESIDENT Curt Juran VICE PRESIDENT Joseph Wood SECTARY Charlie Swimley TREASURER Cory Wadlow SAR-GLNT AT ARM Jeannie Biskup LODI CrrY MID - MANAGERS ASSOCUT ON L.C.M.M.A. P.O. Box ioio WOODBRIDGE, CA 95258 August 3, 2004 Ms. Joanne Narloch Human Resources Director 221 West Pine Street Lodi, CA 95240 Re: Discontinue CaIPERS Insurance Dear Ms. Narloch, The L.C.M.M.A. met on Monday, August 2, 2004, and discussed the options available to us regarding health insurance for 2005. We feel strongly that the City of Lodi does need to save money in future years, but are concerned that money saved will be spent on new programs and/or construction projects. We feel that adding programs or the construction of new facilities would be contrary to any attempts to save money. The City is already short staffed and any new facilities would strain our employee resources even further. In what we feel is in the best interest of the City, the L.C.M.M.A. has agreed on changing insurance providers with the following amendment to our contract: 15.1 All employees are offered medical insurance for themselves and dependents. The City shall pay 100% of the premium for employee only, up to the highest HMO available in our geographical area. Effective as soon as administratively possible, employees shall contribute $80.00 per month for Employee Plus One and $104.00 per month for full family coverage. Should an employee decide to elect single medical coverage, the City of Lodi will deposit $25.00 per pay period into the employee's deferred compensation account. If no coverage is elected, $71.15 per pay period will be deposited into the employee's deferred compensation account. 15.2 Only one City of Lodi employee may carry dependent coverage for another City employee. Co -payments incurred due to the loss of dual coverage will be reimbursed by the City of Lodi on a quarterly basis. 15.3 Retired employees will have the ability to purchase lifetime medical coverage regardless of insurance provider. 15.4 The City of Lodi will contribute to the retirees medical premium cost for health insurance as spelled out in the letter to retirees dated February 27, 2003, reflecting the changes as specified in Senate Bill 1464, effective January 1, 2004, as follow: January 2004: $32.20 per month January 2005: $48.40 per month January 2006: $64.60 per month January 2007: $80.80 per month January 2008: $97.00 per month. The L.C.M.M.A. would like to encourage the City Council to reserve the savings from the reduced health insurance premiums to offset the cost of maintaining current employee benefits and wages. We feel the requests above are reasonable and prudent, as they reflect current practices or are of no cost to the City of Lodi. These requests must be agreed to in writing prior to our acceptance of any changes to our current Memorandum of Understanding. Please feel free to contact me if you have any questions or as soon as a decision is made. Sincerely, Curtis Juran L.C.M.M.A. President CalPERS 2005 Health Premiums -- Regional Contracting Agencies Onl _ • Single 2004 1 2005 2005 Percent Fercent C�ange ({;-) Single 2 -Party Family Single 2 -Party Family Changs Blue Shield CA $319.97 $639.94 $959.91 , 0 $863.34 -10.06% Kaiser CA 273.86 547.72 821.58 0 m 1 . L"Im �.� -11.19% KaiserlOut of State 239.50 479.00 718.50 NOHOW 112 782.85 Blue Shield CA $315.22 $630.44 $819.57 $389.96 $779.92 $9,013.90 23.71% Kaiser CA 305.42 610.84 794.09 354.69 709.38 922.19 16.13% PERS Choice 349.41 698.82 908.47 369.74 739.48 961.32 5.82% PERSCare 544.77 1,089.54 1416.40 619.93 1,239.86 1,611.82 13.80% PORAC 399.00 733.00 931.00 399.00 748.00 950.00 1.80•/0 WHA 280.41 560.82 729.07 322.47 644.94 83$.42 15.00% .. • ■ s Area Los Angeles, San Bernardino, Ventura Blue Shield CA $315.22 $630.44 $819.57 $287.751 $575.50 $748.15 -8.71% Kaiser CA 305.42 610.84 794.09 294.78 589.56 766.43 -3.48% PERS Choice 349.41 698.82 908.47 344.12 688.24 894.71 -1.51%44.77 PERSCare 5 1,089.54 1,416.40 576.96 1,153.92 1500.10 5.91% PORAC 399.00 733.00 931.00 399.00 748.00 950.00 1.80% Basic Premium RatesOther Southern Fresno, Imperial, Inyo, Kern, Kings, Madera, Riverside, Orange, San Diego, San Luis Obispo, Santa Barbara, Blue Shield CA $315.22 $630."1 $819.57 $323.261 $646.50 $840.45 2.54% Kaiser CA 305.42 610.84 794.09 308.24 616.48 801.42 0.92% PERS Choice 349.41 698.82 908.47 351.44 702.88 913.741 0.58% PERSCare 544.77 1,089.54 1,416.40 589.24 1,178.48 1,532.02 8.16% PORAC 399.00 733.00 931.00 399.00 748.00 950.00 1.80% Basic ` Other NorthernZalifornia Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen, Manposa, Idendocino,fflerced, Modoc, Mono,; Monter,Alpine, Benito, Shasta, Sierta, Siskiyou,r. Blue Shield CA $315.221 $630.44 $819.57 $394.26 $788.52 $1,025.08 25.07% Kaiser CA 305.42 610.84 794.09 362.58 725.16 942.71 18.72% PERS Choice 349.41 698.82 908.47 384.38 768.76 999.39 10.01% PERSCare 544.77. 1,089.54 1,416.40 644.48 1,288.96 1,675.65 18.30% PORAC 399.00 733.00 931.00 399.00 748.00 950.00 1.80% WHA 1 280.41 660.82 f2_9 0-71 322.47 644.94 838,421 15.00% ' Out of Kaiser/Out of State $426.93 $853.86 $1,110.02 3475.92 $951.84 $1,237.39 11.47% PERS Choice 349.41 698.82 908.47 402.69 805.38 1,046.99 15.25% PERSCare 544.77 1,089.54 1,416.40 675.17 1,350.34 1,755.44 23.94% PORAC 399.00 733.00 931.00 399.00 748.00 950.00 1.80% _ • Single 2004 2 -Party I Family 2005 Fercent C�ange ({;-) Singh- 2 -Party Family Medicare Premium Rates - All Regions Blue Shield CA $319.97 $639.94 $959.91 $287.78 $575.56 $863.34 -10.06% Kaiser CA 273.86 547.72 821.58 243.22* 486.44* 729.66* -11.19% KaiserlOut of State 239.50 479.00 718.50 260.95 521.96 782.85 8.96% PERS Choice 305.67 611.34 917-01 279.60 559.20 838.80 -8.53% PERSCare 336.07 672.14 1008.21 289.32 578.64 867.96 -13.91% PORAL j 351.00 7,01.001 1,049.00 351.00701.00 11049.001 0.00% WHA 280-241_5W.481 840.72 280.241 560.481 840.72 0.00"/0 'These Kaiser Medicare premiums are lower than those approved by the COPERS Board in June 2-044 and are subject to Board approval. W0104 Approved Regions Public agency membership numbers include all {dans: Blue Shield, PERSCare, PERS Choice, Kaiser and Western Health Advantage. LIST OF CALIFORNIA COUNTIES BY REGION Bay Area/ Los Angeles Other Southern Other Northern Out -of -State Sacramento California California Contra Costa Los Angeles Orange Monterey Out -of -State Alameda San Bernardino Riverside Stanisiaus Solano Ventura San Diego Butte San Mateo San Luis Obispo Humboldt Sacramento Santa Barbara Shasta Santa Clara Fresno Lake Placer Madera Merced Santa Cruz Kern Siskiyou San Joaquin Inyo Alpine Sonoma Tulare Glenn YQb Kings San Benito Marin Imperial Mendocino San Francisco Tuolumne Nevada Calaveras Napa Mariposa El Dorado Trinity Sutter Plumas Amador Lassen Yuba Mono Colusa Tehama Del Norte Modoc Sierra Kaiser already regionally prices its out -of --state premium. Kaiser covers CalPERS members in six regions outside California and Calculates its overall out-of-state premium by using the average premium for those six regions. Regional Pricing Questions and Answers What is Health care costs throughout California vary. Regional pricing adjusts regional premiums to reflect the actual cost of health care in a given region. pricing? Who does Regional pricing affects contracting public agency members enrolled in the regional prig Basic Plan. Regional pricing does not impact Medicare enrolled retirees. impact? Will regional No. CalPERS will continue to base the state rate on the entire Ca1PERS pool prig affect of both public and state agencies. Public agencies will be priced using public the state rate. agency information only and their rates will closely align with what they would pay in the open market where they are located. Why regionally Without regional pricing, CaiPERS members in low cost regions pay price? premiums in excess of market rates. Those in high cost regions pay less than market rates. Last year CalPERS lost 37,000 members, mostly in low cost regions. The loss increased premiums for the remaining members by almost three percent. Regional pricing will ensure CalPERS' premiums are competitive throughout California, stabilizing costs by providing contracting agencies with an increased incentive to stay with Ca1PERS. How did CalPERS contracted with Milliman USA to analyze CaIPERS-specific data. Ca1P.ERS creating county cost indices, and then grouping counties to create regions. create regions? IVIilliman developed county cost indices, adjusting for: • Insurance variation. • Age, sex and disease burden. • Family composition. • Administrative fees. Milliman and CalPERS used the following criteria to group counties into Eve regions: • Location. • Cost indices. • Number of members. How will Stab' will apply Board approved regional factors (see below) to the 2005 state premiums be premium to calculate each regional premium. For example, if the regional impacted by factor is 1.05 and the 2405 state premium is $250, the regional premium is regional 1.05 times $250 or $262.50. pricing? Staff recommended regional factors: Insert chart Will regional Member share of premium is subject to the contract negotiation process. This 'priding change process generally involves the employer and the employees' representative. members out Although Ca1PERS is not involved in these contract negotiations, we of -pocket anticipate that regional pricing will result in more contracting agencies expenditures? remaining in the Ca1PERS health cane pool, stabilizing future costs. The Hidden, Unknown and Unanticipated Costs of Leaving CaIPERS 916-658-1233 CAPERS Blue Shield or c:aikw«gid 31�F Cr,,, or Cali'mI.a is an Wepentlent Un lnOf-penile^1 �Aemi�er ZV Coos; Fssxiatic� r.. the El., he'1c Revised 04/09/04 G A KAISER PERMANENTE. provider level. II.J:_y,�Vi ILyGI l i AJy G1 it FG.-17G1i Il�. _ L..LJa'71..:I�i 1 IGCil L1 ilsGll.Gv � iy pursuing altema#ire #�elth benefit optronS ai hay tfOwida#ect bac �rnplo�r+ ran rnaxir-jze your benefit IS'ars In addition, the CalPERS Board sponsored legislation that became law, effective January 1, 2004, allowing CaIPERS, on behalf of public agencies, to have flexibility in both pricing and benefit structure. 2 4 ges in your agency's demographics an[li-s?pet' )n lives?:How will you fund future rate incresses?. Public agencies have unique costs associated with the purchase and delivery of a health benefits program. First-year premium rates are only one component of the costs and are no guarantee of long-term cost savings, liability protection or labor satisfaction. in choosing to administer your own healthcare plan, you will have to duplicate most or all of the services currently provided by CalPERS. Consider the following important points when evaluating participation in the CalPERS health benefits program and the significant impact that may result to your healthcare costs and administrative resources: In. choosing to administer your own healttaeare plan, you may experience substantial increases m adr inistrative costs, resulting from labor. relations' time and expense relating to labor negotiations involving benefit design, renewals, contribution levels, provider network/out-of-area coverage and retiree issues. Additionally, education and training will be required, possibly requiring new job classifications in order to provide the level of expertise CaIPERS furnishes, in administering your plan, in managing the services provided by your broker and in interpreting contracts, legislative compliance and other mandates. If you join a coalition, you will need to represent your agency on a regular basis and take on the "hat" of evaluating renewals: and other information .to -disseminate to your board/council members. The additional work may drive additional costs, as you may be required to hire more human resources support staff to administer your plan. This staff will be required to act in capacities such as contract interpretation, contract development, dispute resolution and legislative and administrative compliance as well as to facilitate open -enrollment events and materials. It is important to remember that from a legislative and contractual compliance basis, your agency must provide all of the resources and services that CaIPERS provides. Online services for health enrollment., billing and electronic fund transfer are also provided by CaIPERS to participating public agency employers at no charge. CaIPERS charges a very low administrative fee, currently less than one-half of 1 percent at 0.44%. Blue Shield (916) Sv8-1233 CAPERS ofcalffomia KAISER PERMANEWE® �.IM IL Bit.e[rass of Cld—raisan 1141 Pe 11 A. im.p¢ dent Member Revised 04/09/Iy4 H SISM KP -5 '.. t�thP61V CAR -b- ftMS1U ShpldA-anon 2 Executive Office P.O. Box 942701 Sacramento, CA. 94229-2701 Telecommunications Device for the Deaf (916) 326-3240 CaIPERS. (916) 326-3851, FAX (916) 341-2545 April 2004 We've heard you. I want to assure you the California Public Employees' Retirement System's (CaIPERS) Board Qf Administration has a renewed focus on public employer needs and understands the unique health- care issues facing you and your employees. We know many of you are looking at the marketplace to help answer the difficult questions around rising healthcare premiums. The CaIPERS Board is aware of the recent increase in marketing efforts directed at public employ- ers in California. Several issues are fueling these efforts, and I want to share these with you, as well as highlight the significant benefits of staying with CaIPERS and the increased costs to your agency should a decision be made to leave CaIPERS and contract for your health ben- efits program from another party. Due to Vehicle License Fee (VLF) reductions, the Educational Revenue Augmentation Fund (ERAF) changes, reduced state funding and additional budget reductions impacting local governments, your human resources and budget staff are facing unprecedented fiscal pressures. Unfortunately, these pressures coincide with the aggressive marketing tactics focused on public agencies by brokers and health plans, causing many to erroneously believe- savingscan be found in their healthcare preMiu _ $ thMUgh "first-year rates." Please be aware your future healthcare costs for employees involve more than just initial low premiums offered by brokers working on commission. There are a considerable number of costs associated with administering a health program on-site, requiring in-depth knowledge to oversee and plan performance and to understand benefit design, contribution levels, renewals, contract provisions, out -of -area coverage, retiree issues and cost containment. Should you leave CaIPERS, all of these factors will significantly contribute to your future renewal costs, which you Will no longer be able to spread over a risk. off! of 1.2 million members. When presented with proposals to leave CaIPERS, please be aware that the CaIPERS Board of Administration has adopted a five-year waiting period for a public employer that elects to ter- minate participation under CaIPERS and the Public Employees' Medical and Hospital Care Act before it may return to CaIPERS. A -gW* -2- Currently,, CalPERS administers your,health benefit oroaMm at thp yety lowest fee available tQ public em foyers in the state. CalPERS administrative costs are .44 percent, or less than half a percent of premium. With CalPERS, there are no broker commissions or additional fees for materi- als, annual enrollment, rate negotiations or contract development. Further, smaller public agencies cannot duplicate the resources provided by CalPERS and its health plan partners, such as support with specialists in information technology, benefit administration, online enrollment, employee communications, educational material, legal review, provider negotiations, network maintenance, member grievances and legislative and policy updates. Through CalPERS, your agency receives a premium that is predictable, steady and not subject to sudden spikes or unanticipated plan cancellations. A recent survey by Milliman U.S.A. shows that CaIPERS HMO rate increases have been lower than the state and national averages for the past ten years (see enclosed chart). CalPERS insures over 1.2 million lives and is the largest purchaser of public health benefits in California and the second largest purchaser in the nation. No p jic agency in Caiifomia has more clout than CalPERS with health plans. the medical community and labor grogps__wftn tacidina the complicated issues influenching healthcare premiums and deli . There is no equivalent voice for agencies and schools to promote accountability, performance and competition among healthcare providers. And, CalPERS offers the leverage of size and contract stability that enables it to provide wellness and disease management programs designed specifically to meet the needs of your CalPERS participants. CalPERS is driving the market to better maximize your healthcare dollar—instead of reacting to market forces. Today, CalPER is actiyQly ou!§ na: • Alignment in the amounts paid by public agencies for health insurance through CalPERS with what they would pay in the open market • Greater flexibility to offer varied benefit options to meet public agencies' and employees' diverse needs • Responsible, innovative strategies to impact and address the key drivers of healthcare cost increases, such as hospital costs I hope you will remain with CalPERS as we move forward together to address and solve the chal- lenges we all face in the healthcare arena. Please let us know if you have questions or if we can be of service to you. You may reach Curtis Howard, Chief, Office of Employer and Member Health Services, at (916) 326-3577. Sincerely, Jarvio A. Grevious Assistant Executive Officer Health Benefits Enclosures CaiPERS Leads the Nation and the State in Low -Cost Public Agency Healthcare CalPERS Basic HMO Increases Compared to National and State HMO Averages 2.2 2.0 1.8 4i 1.0 0.8 0.6 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 10 YEARS COMPOUNDED: CaIPERS HMO * National HMO California HMO 0 BlueCross of California Blue Shield (916) 658-1233 Ca1P`ERS -''FES of California Bi` C"' CAf.— is-inticpenDent AnIMppendenl 6Ae , Licenyee of the B l oe C—All—l- of the Bl ue Sheld Asia[ ial ion Revised 04109!04 C A KAISER PERMANENTE® to simplify the enrollment process for employers and employees. Blue Shield {916) 658-1233 Ca1PERS I] uc C-11. in oe,nctni ., r,InticpennFn[AAcm6e• RLvised 04/09/04 D u rie6' <e•e[s :so r.r t Pl-=nejdA.—dvon 14 KAISER PERMANENTE. 2 (916) 658-1233 Revised 04/09/04 E '.' 'T Blue Shield CaIPERS 9 O'Califurnia E6,1r— 1� cA , ' 1'.BP—[ �, 1M,p,.d-t I�� mr L is msec , ; h, EI e c ';S A, —iM.' ' Cl ,h, a. sh.ld Assxiarion A VAISER PERMANENTE® Determine your future before making a decision about health benefits (916) 658-1233 Revised 04/09/04 E '.' 'T Blue Shield CaIPERS 9 O'Califurnia E6,1r— 1� cA , ' 1'.BP—[ �, 1M,p,.d-t I�� mr L is msec , ; h, EI e c ';S A, —iM.' ' Cl ,h, a. sh.ld Assxiarion A VAISER PERMANENTE® 2 (9 �- Blue Shield (916) 658-1233 CaIPERS ofGalijimlia £lue EroR cl C�'ifo.nr'�sa",�PentlM�l tinp�en�nl �u rr��r Revised 04/09/04 F2 8100 «rte d,ri Ecw=. 5_ad n of0.nee,�esneie ,su: , .n A KAISER PFRMANENTE. 00 bt Yep s care due �o c (9 �- Blue Shield (916) 658-1233 CaIPERS ofGalijimlia £lue EroR cl C�'ifo.nr'�sa",�PentlM�l tinp�en�nl �u rr��r Revised 04/09/04 F2 8100 «rte d,ri Ecw=. 5_ad n of0.nee,�esneie ,su: , .n A KAISER PFRMANENTE.