Health Insurance Rates to Jump 25%
City employees to feel hit Jan. 1. Other businesses can expect to see increases as well
Laura Sturza
You name the evidence, Bill Brown has seen it.
Health insurance premium hikes of up to 25% on the horizon for city employees, probably are a precursor to rising costs for everyone else.
About 790 city employees and 1,300 Burbank Unified School District employees will be affected beginning January 1. Some monthly out-of-pocket expenses will climb more than 25% based on the number of family members covered.
The California Public Employee' Retirement System (CalPERS) made the announcement earlier this month.
For a family of four insured under one of the plans, the monthly premium will go from $546 to $674 next year, a nearly 25% increase. With the city footing $515 of that amount, the family out-of-pocket expenses jump from $31 each month to $159.
"I've hear a lot from my members, and there's a definite concern." - Bob Kaczmarek, President of Burbank City Employees Association.
Affected employees include police and fire staff, teachers and other city employees. The city also has 453 retirees enrolled in CalPERS. The number of school retirees was not available.
"For the retirees, the increases in some of the Medicare plans were huge, like 40.1%. "They may just get to the point where they get the coverage or take the gamble and not get the coverage." - Bob Kaczmarek
Other businesses are likely to feel the sting as other insurers announce changes.
"The CalPERS rates are usually like the ones throughout the country. "They're the first ones published, so it's kind of like a barometer, because they are so large." - Bob Kaczmarek
CalPERS is a state agency that acts as a broker, purchasing health coverage for active, inactive and retired members of state agencies, school districts and local public agencies. It is the largest purchaser of public employee health benefits in California and the second largest nationally.
"Our staff who negotiate these rates every year were stunned by the rates that came in this year." spokesman Clark McKinley said.
Along with the increases, two plans, Health Net and PacificCare, no longer will offer services through CalPERS.
"Open enrollment will be begin about mid-August, when information on plan changes and details of specific costs will be mailed" - Clark McKinley