Healthcare Cost Containment Gets a Boost from CalPERS

In a stunning turn of events, the governing board of California Public Employees Retirement System, the third largest non-federal purchaser of healthcare in the country is backing legislation to require Kaiser to provide documentation justifying rate increases.

Support was in doubt when CalPERS staff recommended a ‘neutral’ position on the bill, SB 746, by State Senator Mark Leno (D- San Francisco).  However Local 21, Community Campaigns for Quality Care, UNITE HERE Local 2, SEIU Locals 1021 and 721 and other unions lobbied the board, writing letters and traveling to Sacramento earlier this month for a key committee hearing.  The committee reversed the staff recommendation and gave a resounding 6-1 vote to support the bill.  The next day the full CalPERS Board followed suit.

Local 21 Executive Director Bob Muscat wrote to the Board, “Kaiser’s premiums have shot up 65% since 2007.  Our members would benefit from a much greater level of transparency in the health market.  This is especially important given that healthcare costs are taking up more and more of public sector budgets.”

Meanwhile the legislation has passed the Senate and is awaiting action in the Assembly Appropriations Committee.  

In San Francisco, the Health Service System Board (the independent City board that contracts for health coverage) and public employee unions, including Local 21, collaborated for months to pressure Kaiser to reduce or justify its 2014 premium proposal, which added 5.25% over the 2013 premium even though Kaiser members have been trending younger and using fewer services.  While San Francisco reluctantly agreed to extend the Kaiser contract for another year, Local 21, other city unions, and the City won agreements that set the stage for more transparency and accountability in the next contract negotiations with Kaiser which are expected to begin soon.