Bloomberg News

California Pension Approves 9.6% Health-Care Increase

June 13, 2012

The board of the California Public Employees’ Retirement System, the largest U.S. pension fund, increased premiums it charges retirees for health-care insurance by 9.6 percent.

Without discussion, the panel unanimously voted to charge members an average $30 a month more. The changes are expected to raise total premiums next year by an average of 9.6 percent for its 1.3 million members, following a 4.1 percent boost this year.

Calpers, as the $225 billion fund is known, says it is the largest employer buyer of health benefits in California, and the nation’s second-largest public purchaser after the federal government. It spent $6.67 billion in 2011 on health benefits.

“We introduced a number of initiatives over the past three years to help stabilize rates, but today’s rates reflect the overall continuing upswing of health-care costs,” Priya Mathur, chairwoman of the committee, said yesterday in a statement. “We tried as much as possible to keep the overall increases close to the national health-care cost inflation rate of more than 7 percent projected for next year.”

To contact the reporters on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net and James Nash in Los Angeles at jnash24@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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