Governor Details Health Care Co-Op : Insurance: State program aims to cut costs for small employers. Wilson is accused of misstating how much.

Gov. Pete Wilson, proclaiming “a new way, a better way, a less-expensive way for small businesses to buy health insurance,” on Tuesday unveiled California’s state-run cooperative for purchasing medical coverage.

The cooperative, regarded as a potential model for federal health reforms, is part of sweeping changes to take effect July 1 in the state health insurance laws governing small businesses. Called the Health Insurance Plan of California, the cooperative is a collection of 18 managed care carriers who have contracted with the state to supply group coverage at reduced rates to small businesses, defined as those with five to 50 employees.

The cooperative claims to offer several marketing advantages over private carriers--in particular, a wider choice of plans--but it was evident Tuesday that it aims to make low price a major selling point.

Wilson kicked off the state’s effort to promote the cooperative at a press conference Tuesday morning at National Concrete Cutting Co. here.

Mike Meyer, controller of the small industrial firm, said the company became the cooperative’s first customer when he learned he could chop $500--about 15%--off the monthly health insurance bill by switching carriers.

Blue Cross of California, the largest player in the small-group market with 260,000 people covered, opted not to join the purchasing cooperative, citing loss of control over pricing.

On Tuesday, Blue Cross released its own price figures for comparison with the cooperative’s.

The pricing system is complex, but for a 25-year-old employee in Orange County without a spouse or dependents, the cooperative’s monthly premium--including marketing and administrative costs--for a health maintenance organization plan ranges from $98 to $158, depending on which carrier is chosen. The Blue Cross rate is $115.

A 45-year-old Los Angeles worker with a spouse and children in a standard preferred provider organization plan would pay from $492 to $738 through the cooperative. Blue Cross charges $469.

Wilson ran into contention with his low-price claims when he said that cooperative rates for a typical small business are 6% to 23% lower than those that the California Public Employees Retirement System offers state workers.

CalPERS, praised lately for its own health care cost-cutting, quickly cried foul. With differences in benefit design and other factors, Wilson was “mixing apples and guavas,” said Tom Elkin, CalPERS health benefits executive.

A spokesman for the state Major Risk Medical Insurance Board, which oversees the cooperative, defended the comparison but said there was “no attempt to make PERS look bad. We consider PERS like a sister.” The governor and the CalPERS board have clashed in the past over control and management of the huge state pension system.