CalPERS Staff Calls for Kaiser Premium Hike

The staff of the California Public Employees’ Retirement System has recommended a 10.75% increase in medical premiums for Kaiser Permanente next year--a rate hike that will cost the pension fund an additional $49.3 million. The state pension fund and Kaiser have been squabbling for two months over Kaiser’s demand for a 12% increase in HMO rates, a request that CalPERS officials had earlier blasted as “outrageous.” The CalPERS board, which must approve the increase, will consider the matter at its meeting Tuesday. In accepting the rate hike, the CalPERS staff said Kaiser consented to stricter financial monitoring by the pension fund. Kaiser is still in negotiations with another large employer group, San Francisco-based Pacific Business Group on Health, over 1999 rates. Kaiser has asked for an increase in excess of 11%.