CalPERS, a large California-based healthcare purchaser that is a rate-setting bellwether, says it has approved an HMO rate hike of at last 16%, coupled with some co-payment increases, for 2004.
The board of the California Public Employees' Retirement System in Sacramento, better known as CalPERS, voted 7-5 on Wednesday to increase basic plan premiums by an average of 16.7% to 18.4%, the group reports.
Though high, it says that increase is almost half of what HMOs had initially wanted.
The group adds that it also set new co-payments at $50 for emergency room visits and $45 to $75 for nonformulary prescription drugs.
In a release, CalPERS says major factors causing the increase are rising medical needs of an aging population, a growing number of people with chronic conditions, escalating demands for new diagnostic and treatment technologies, pricing demands by hospitals and prescription drugs.
The nation's third-largest purchaser of health care, CalPERS has 1.2 million enrollees and a 2003 health program budget of $3.4 billion.