July 20, 2023
During an offsite meeting in Monterey July 17-19, the California Public Employees’ Retirement System’s (CalPERS) Board of Administration approved increased health plan premiums (with a 6-5 split vote), beginning in January 2024.
Last year, the CalPERS Board of Administration approved health plan premiums for calendar year 2023 that represented a 6.75 percent increase from the prior year. The adopted 2024 premiums reflect an average increase of 10.8 percent but vary widely by plan with two popular Preferred Provider Organization (PPO) plans increasing substantially more. In an effort to smooth out the cost increases for PPOs, CalPERS considered a range of options that would include a one risk pool phase-in over either two or three years. After lengthy discussion with public comment, CalPERS voted to adopt a three-year transition of basic HMO and PPO plans into a single risk pool beginning in 2024. CalPERS argues that this change will stabilize enrollment across the HMOs and PPOs by pricing the plans based on the value of their benefits and network instead of the mix of healthy or unhealthy members in a plan. This strategy was adopted, disappointingly, despite acknowledgement from board members that the premium increases are high and will financially impact members.
CalPERS attributed the increases for the 2024 premiums to rising medical costs and continued high pharmacy costs, but also notes other factors such as inflation, an additional surcharge, and decreased Federal Medicare Reserves. CalPERS participates in the Rate Development Process each year, during which the Board considers new health plans, expansions of existing health plans, and benefit design changes. Health carriers submitted their initial premiums to CalPERS earlier this year and met with the CalPERS rates team to discuss data, assumptions, and models used to calculate the proposed premiums.
The 2024 premiums adopted this week will go into effect January 1, 2024. While employees and employers will see increased premiums on average, the actual increase or decrease will vary based on plans. For example, for the adopted 2024 basic plan premiums, the percent change from 2023 varies along a spectrum of a 2.4 percent increase (Anthem Blue Cross Select HMO) to a 13.6 percent increase (Kaiser Permanente Out of State). Notably, all Kaiser plans included the most significant premium increases, and Kaiser accounts for approximately half of all basic CalPERS members. Medicare plan premiums will also increase in 2024, on average by 9.6 percent overall.
The impact on counties and other agencies that contract with CalPERS for health plans will be determined by the negotiated health premium contribution amount of each agency. More information regarding the increased premiums, the CalPERS meeting agenda, and associated meeting materials, are available on the CalPERS website.
FAQs
SACRAMENTO, Calif.
Will CalPERS get a raise in 2024 in California? ›
This May, all CalPERS retirees who retired in 2022 or before will receive a bump in their retirement check through a cost-of-living adjustment (COLA). The COLA takes effect the second calendar year after retirement to help retirement benefits keep up with the rate of inflation.
What is the CalPERS rate for 2024? ›
Effective Date: January 1, 2024
| Plan Name | Single (1) | Family (3+) |
|---|
| CCPOA - North | $1,012.42 | $2,741.18 |
| CCPOA - South | $834.67 | $2,263.07 |
| Health Net Salud y Más | $670.10 | $1,742.26 |
| Kaiser Permanente (CA) | $983.43 | $2,556.93 |
15 more rows— Covered California announced its health plans and rates for the 2024 coverage year with a preliminary weighted average rate increase of 9.6 percent.
Did Kaiser Premiums go up in 2024? ›
Kaiser announced plan and rate updates for January 1, 2024 effective dates. Rates are available for quoting! Medical: Northern CA: 10% average annual increase.
What is the cost-of-living increase in California in 2024? ›
Consumer Price Index, Los Angeles area — May 2024
| Month | All items | All items less food and energy |
|---|
| Nov 2023 | 2.8 | 2.8 |
| Dec 2023 | 3.5 | 3.4 |
| Jan 2024 | 2.5 | 3.7 |
| Feb 2024 | 3.4 | 3.8 |
33 more rowsCOLA is an annual cost-of-living increase that begins the second calendar year after retirement and helps your retirement benefit keep up with the rate of inflation. Eligible retirees, including survivors and beneficiaries who receive a monthly benefit, receive COLA on their May 1 retirement check.
Why is CalPERS health insurance so expensive? ›
The primary driver of the premium increases is rising costs due to high medical inflation. In the Basic program, Kaiser Permanente and the PPO plans are experiencing the highest increases.
How much will Medicare premiums increase in 2024? ›
The standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024, an increase of $9.80 from $164.90 in 2023.
What is the income limit for Covered California 2024 California? ›
In 2024, an individual in a one-person household is eligible for some degree of Covered California subsidies if they earn up to $33,975 Meanwhile, that limit rises to $69,375 for a household size of 4. These numbers refer to your Adjusted Gross Income (AGI) as found on line 11 of your Form 1040.
Overview. Before you turn 65, you'll need to enroll in Medicare to keep your CalPERS health coverage. Once you retire, CalPERS becomes your health benefits officer. You can change your health plan and add/delete dependents during Open Enrollment in the fall (or within 60 days of a qualifying status change).
Is Kaiser raising California rates by up to 15 next year? ›
Kaiser Permanente has notified its California customers that it will increase its commercial rates by as much as 15.5% next year in the state, according to an email obtained by Repairer Driven News.
What will Medicare Part D premiums be in 2024? ›
2024 Part D national base beneficiary premium — $34.70
Medicare uses the national base beneficiary premium to estimate the Part D late enrollment penalty and the income-related monthly adjustment amounts listed in the table above. This amount can change each year.
What is the Lacera COLA update for 2024? ›
How the Current COLA Was Determined. At its February 7, 2024 meeting, LACERA's Board of Retirement approved a 3.5 percent 2024 cost-of-living adjustment (COLA) increase, exceeding the maximum allowed for retirees and eligible payees for all plans.
What is the 2024 Lafpp COLA update? ›
First, the Cost of Living Adjustment (COLA) has been approved by the Board at 3.4%. All eligible pensioners and DROP participants will receive an increase beginning with the payment/deposit dated July 31, 2024. Second, the maximum non-Medicare Subsidy for retired members will increase by 3.3% to $2,241.39 per month.
What is the UC retiree COLA for 2024? ›
Effective July 1, 2024, the COLA rate is 2.00% for those with a retirement date on or before July 1, 2023. The COLA for UC-PERS Plus 5 benefit recipients is also 2.00% (set as the same as the COLA for UCRP benefit recipients with a retirement date of October 1, 1991).
Are CA State employees getting a raise? ›
CalHR Releases Pay Letters Implementing July 1, 2023 Salary Increases. Views: 12992 Print: On December 12 and 14, 2023, CalHR issued a series of Pay Letters implementing the 3% General Salary Increases and many Special Salary Adjustments (SSA) effective July 1, 2023 for covered supervisors and managers.
