3.8% Premium Cut Negotiated for CalPERS : Health care: The pension fund for state workers will save $80 million for the 1,000 employers in plan.

The California Public Employees Retirement System said Wednesday that it has negotiated an overall 3.8% reduction in medical premiums with 22 health plans for the 1995-96 year.

The giant pension fund for state workers said the reductions represent a savings of $80 million over the 17-month contract for the 1,000 state and local government employers in the CalPERS’ health program.

CalPERS negotiates health care for nearly a million government employees and their families, representing $1.5 billion per year in health premiums. The agency, which is considered a national model for health care purchasing cooperatives, has negotiated reductions in medical premiums for its members each of the past three years, though next year’s rollbacks are its biggest yet.

CalPERS said it negotiated an overall 5.2% reduction with 17 HMOs and a 2.3% premium increase with more loosely structured health plans known as preferred provider organizations and with self-funded employers’ plans. About 80% of CalPERS members are enrolled in HMOs.

Two of the state’s largest HMOs, Kaiser Permanente and Health Net, agreed to slash their medical premiums by more than 7%.

Although some health care industry officials have said that CalPERS will be unable to continue reducing premiums, CalPERS chief Tom J. Elkin said he expects more rate cuts for 1997.