CalPERS has proposed an 85% premium increase for 115,000 of its 150,000 long-term care beneficiaries, the Sacramento Business Journal reports (Robertson, Sacramento Business Journal, 10/12).
The proposed hike is higher than the 75% increase CalPERS officials were considering earlier this month.
Bill Madison, CalPERS spokesperson, said the previously proposed 75% rate hike "was a work in progress" (Kasler, Sacramento Bee, 10/11).
Unlike its pension benefits program, CalPERS' long-term care program is not funded by taxpayers, and the pension fund must pay its own claims. According to CalPERS officials, the long-term care program has enough money for now but will face budget shortfalls in decades to come.
Ann Boynton, CalPERS' deputy executive officer, recently said, "At current course and speed, we would not have enough money ... to pay anticipated claims" in the long-term care program (California Healthline, 10/4).
Details of Proposed Premium Increase
The proposed 85% increase would take effect in 2015 and would be phased in over two years (Sacramento Business Journal, 10/12).
CalPERS officials said that as an alternative to the 85% hike over two years, the fund could increase rates by 79% in one year.
Regardless of which rate increase is implemented, the pension fund hopes that the hike would "stabilize" the long-term care insurance program.
CalPERS' pension and health benefits committee will review and vote on the rate hike proposal on Tuesday. CalPERS' full governing board will consider the proposal on Wednesday (Sacramento Bee, 10/11).