CalPERS Expected to OK Kaiser Rate Boost

The health-benefits committee of the California Public Employees’ Retirement System is expected to allow Kaiser Permanente to raise premiums for its 1 million members in 2001. The board will consider a proposal Tuesday to give Kaiser an increase of about 10%, people familiar with the talks said. Neither CalPERS nor Kaiser officials would comment. Employers nationwide are watching CalPERS closely since its decision is seen as a bellwether for rate increases across the country. Analysts said they expect the committee to let other HMOs, including Foundation Health Systems Inc., PacifiCare Health Systems Inc. and Aetna Inc., impose premium increases in line with Kaiser’s. The HMOs have been able to win premium increases from CalPERS for the last two years, citing higher medical costs and years of steady rates throughout the 1990s. CalPERS is the No. 2 buyer of health insurance after the U.S. government.