CalPERS Efforts Save State More Than $1 Billion in Employee Health Costs in Three Years

SACRAMENTO, CA – The California Public Employees’ Retirement System (CalPERS) recently reported to the State Legislature that it has saved the state $1.2 billion in health care costs since 2008.

In a letter to California’s Joint Legislative Budget Committee Chair, State Senator Mark Leno (middle left photo), CalPERS Chief Executive Officer Anne Stausboll (top right photo) reported CalPERS reduced the cumulative health care costs for state and public agency employees by $1.2 billion over the last three years.

Of that amount, CalPERS achieved more than $587 million in savings for the State’s General and Special Funds. The letter accompanied a required report to the Committee regarding CalPERS 2012 health rate premiums and one-time savings.

The report indicated savings for 2011 were just over $78 million, including more than $36 million in savings for the State General and Special Funds. Pharmacy copayment changes, the use of high-performance provider networks, and CalPERS value-based purchasing and health care cost savings initiatives accounted for a large portion of those savings.

 The report shows 2012 health cost savings at more than $104 million with almost $50 million in savings for the State General and Special Funds. In her letter, Stausboll wrote that CalPERS was able to negotiate premium rate increases of only 4.1 percent for 2012 to help achieve those savings.

“Each year, the (CalPERS) Board of Administration carefully considers specific strategies that will reduce the premium costs by extracting costs from the system on a long-term basis, and strategies that will result in one-time savings,” wrote Stausboll. “We will continue to pursue robust rate negotiations and partner with our health plans to minimize future rate increases and ensure CalPERS members have access to affordable, quality health care.”

CalPERS is the largest purchaser of public employee health benefits in California, and the second largest public purchaser in the nation after the federal government. CalPERS provides health benefits to more than 1.3 million State and public agency active and retired members at an annual cost of nearly $7 billion.

Contact:

External Affairs Branch

(916) 795-3991

Robert Udall Glazier, Deputy Executive Officer

Brad Pacheco, Chief, Office of Public Affairs

Contact: Bill Madison, Information Officer

pressroom@calpers.ca.gov