June 18, 2019

Communications & Stakeholder Relations
Contact: Stephanie Buck, Information Officer
(916) 795-3991 - newsroom@calpers.ca.gov

SACRAMENTO, Calif. – The CalPERS Pension and Health Benefits Committee (PHBC) today approved the health plan rates for 2020, at an overall average premium increase of 4.65 percent. The action also included two health plan changes. The full board will vote on final approval of the rates on Wednesday.

"We negotiate aggressively because we know that many of our members must pay the entire cost of any premium increase entirely out of their own pocket," said Rob Feckner, PHBC chair. "While these rates reflect the current state of the health care market, we expect the health plans that do business with us to also take strong actions to keep costs down. We'll continue to hold them accountable and to be more transparent as we work on behalf of our 1.5 million members in our program."

Health care costs are rising due to a number of factors, including increases in hospital admissions, outpatient surgical procedures, and pharmacy costs. CalPERS uses innovation to keep costs low while upholding quality health care.  

Members enrolled in CalPERS' Basic (non-Medicare) Health Maintenance Organization (HMO) health plans will see a 5.98 percent average premium increase. Members enrolled in Basic Preferred Provider Organization (PPO) plans will see an overall average increase of 3.28 percent. CalPERS Medicare plan enrollees will see their premiums increase by an average 1.52 percent.

In May the board voted to spend down the premium increase for the PERSCare Basic PPO plan, from a projected average increase of 23.9 percent to a final increase of 6.45 percent for 2020. The board allocated these funds using $44 million in excess reserves from the health care reserve fund. The reserve fund helps protect CalPERS and its members in years where medical and/or pharmacy claims are higher than expected among the system's self-funded PPO plans.

The following chart represents the percentage premium change for each health plan, between 2019 and 2020. Note this reflects only the state, single-party Basic premiums.

Plan Name Premium Change
Anthem HMO Select +6.04%
Anthem HMO Traditional +7.86%
Blue Shield Access+ +13.91%
Blue Shield Trio New plan, no change
Health Net Salud y Más +7.07%
Health Net SmartCare +18.15%
Kaiser Permanente +3.06%
PERS Choice +2.91%
PERS Select +0.00%
PERSCare +6.45%
Sharp +2.08%
United Healthcare +4.48%
Western Health Advantage +3.56%

The new premiums will take effect January 1, 2020. Detailed information on 2020 rates for HMO (PDF), PPO (PDF), and association (PDF) plans are available on the CalPERS website.

Besides the premiums, the board approved these health plan changes for 2020:

  • Blue Shield will introduce a new, narrow-network health plan called Trio for the following six counties: El Dorado, Los Angeles, Nevada, Placer, Sacramento, and Yolo.
  • Anthem will introduce a new HMO Medicare Advantage plan for combination enrollment members in Monterey County.

There are no copay, benefit, or coinsurance changes for 2020, excepting association plans which do not fall under CalPERS purview.

In 2020, a new three-region model will go into effect for public agency and school employers that contract with CalPERS for health benefits. The board approved the change in region structure in December 2018.

"Regions enable CalPERS to provide high-quality health plans to local employers with rates that are competitively priced and in alignment with the cost of care in the market," said Liana Bailey-Crimmins, CalPERS chief health director.

CalPERS will continue to develop its other successful benefits and programs that contain costs without sacrificing quality. In 2019, CalPERS introduced a value-based insurance design (PDF) to its PERS Select Basic PPO plan. PERS Select plan membership increased from 55,675 members in December 2018 to 72,351 members in January 2019. CalPERS will also continue to optimize its reference-pricing program for value-based procedures to include pharmaceuticals. Since 2011, the program has saved more than $8 million per year.

CalPERS members can change health plans during the annual Open Enrollment period, September 9 to October 4, 2019. Open Enrollment materials, information on health plan options, and custom search tools will be available through members' my|CalPERS accounts beginning August 26, 2019. Access the mobile version at mobile.my.calpers.ca.gov.

About CalPERS

For more than eight decades, CalPERS has built retirement and health security for state, school, and public agency members who invest their lifework in public service. Our pension fund serves more than 1.9 million members in the CalPERS retirement system and administers benefits for more than 1.5 million members and their families in our health program, making us the largest defined-benefit public pension in the U.S. CalPERS' total fund market value currently stands at approximately $365 billion. For more information, visit www.calpers.ca.gov.