CalPERS is considering a 75% premium increase for most of its 150,000 long-term care beneficiaries, the Sacramento Bee reports.
The increase would take effect in July 2015.
Unlike its pension benefits program, CalPERS' long-term care program is not funded by taxpayers and 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, said, "At current course and speed, we would not have enough money ... to pay anticipated claims" in the long-term care program.
Details of Possible Premium Increase
The 75% rate hike being considered by CalPERS would be its largest to date, possibly requiring some beneficiaries to pay hundreds or thousands of dollars more annually. Officials are considering phasing in the hike over three to five years.
Officials also are looking into offering a cheaper, less-comprehensive policy as an alternative. The alternate plan would cap benefits at 10 years without inflation protection. Officials say that the less-comprehensive plan would be popular because most people do not need more than a few years of long-term care services.
Boynton said that CalPERS wants to provide beneficiaries with "a comfort level with a somewhat lesser benefit than they're purchasing now, but that's adequate," adding, "We do think that they will be very receptive to it."
CalPERS' pension and health benefits committee will review the proposal for the rate hike on Oct. 16, and the CalPERS board of administration is expected to make its final decision on the proposal on Oct. 17 (Kasler, Sacramento Bee, 10/4).