This set up a dynamic where next year, single public agency workers in Los Angeles will pay a monthly premium of $611 for traditional Anthem HMO coverage, while their counterparts in Sacramento will pay $1,113. Family coverage for the same plan is $1,588 in Los Angeles, $2,893 in Sacramento. Employers pay part of the tab, but workers pick up the rest. The breakdown varies by employer.“Ouch,” said Phil Wright, administrative services manager for the city of West Sacramento, said of the public agency rate hikes next year. “When your monthly health insurance premium is more than your mortgage payment, there’s a problem.”
Wright’s comment reflects the unsustainable structural costs that are at the heart of the health insurance crisis. Wright is essentially putting the cost of health coverage on a par with housing costs. What’s noteworthy here is these are premiums negotiated with the purchasing power of many combined local government agencies in the nation’s largest state: California. Because of the state’s size and the purchasing power of the California Public Employees Retirement System (CalPERS), health plan cost trends in the Golden State are seen as an indicator of where rates are headed nationally.
“Frankly, these costs are unacceptable,” Doug McKeever, chief of the CalPERS health policy research division, told the Sacramento Business Journal. “It’s a really tricky dynamic for us as the cost is born by employers and members,” he added. “We need to look at alternative strategies to bring down costs.”
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