CalPERS Health Benefits Program 2007 Rates

1. CalPERS Health Benefits Program2007 Rates

2. Public Employees’ Medical and Hospital Care Act (PEMHCA) CalPERS Objective • To provide you, our employers, with a comprehensive, cost-effective health benefits package Why? • To help agencies attract and retain qualified employees • To foster a healthier and happier workforce

3. What’s Happening in the Public Employer Insurance Market? • Local governments are under pressure to reduce costs due to budget constraints • Public agencies are looking for cost saving alternatives • Commercial rates may change significantly after the first year

4. CalPERS Understands Health Care Cost Drivers • Escalating hospital costs • Member health decisions • Medical technology • Uninsured population • Federal and state mandates • Aging population • Provider reimbursements • Escalating pharmacy costs • Chronic diseases • Provider disruptions

5. CalPERS Basic HMO IncreaseLower than the California and national averages for 10 years

6. CA Legislative Analyst’s Office(LAO) In 2006, LAO said CalPERS saved more than $168 million since 2002 by implementing the following initiatives: • Did not renew contract with Health Net and Pacific Care - $77M • Narrowed Blue Shield’s hospital provider network - $45M • Moved Medicare eligible members from basic to Medicare plans - $19M • Provided member incentives to use over the counter and mail order prescriptions - $27M Other Contracting Agency-specific initiatives: • Adopted Regional Pricing - $40M

7. Approved Regions for Contracting Agencies • 2007 CalPERS Regions • Bay Area/Sacramento • Los Angeles Area • Other Southern • Other Northern • Out-of-State

8. CalPERS 2007 Health PremiumsMedicare Rates

9. CalPERS “More Than The Premium” • Experienced • Proven Leaders • Committed • Innovative • Educators

10. CalPERS Quality Care and CoverageDisease Management Programs Programs to improve outcomes and cost-effectiveness • Identify and educate high risk individuals • Case management • Five chronic disease care programs • Asthma • Diabetes • Cardiovascular risk reduction • Chronic Obtrusive Pulmonary • Heart Failure CalPERS health plans provide these programs at no additional premium cost.

11. CalPERS Quality Care and CoverageStrategic Initiatives Member Engagement • CalPERS Web-based Health Plan Chooser Tool • CalPERS Health Wallet • Member Incentives • Pilot programs such as Blue Shield’s Healthy Lifestyle Rewards program • Telemedicine • Blue Cross telemedicine pilot program implemented for select PERSCare and PERS Choice Basic plan members in 2006

12. CalPERS Quality Care and CoverageStrategic Initiatives (cont’d) High-Intensity Case Management (HICM) • Blue Shield pilot program indicates preliminary estimated savings of over $7,000 per case • Staff continues to review results of existing HICM programs Centers of Expertise (COE) • CalPERS works with health plan partners to identify certain procedures and facilities as Centers of Expertise • Planning to implement bariatric COEs in 2006 • Reviewing joint replacement surgery COEs for 2007

13. Addressing Public Agency NeedsEase of Program Administration Administrative Support • Established negotiating power with health plans and providers • Online enrollment system (ACES) • Continuous educational and program support • Timely grievance resolution of both provider and plan issues • CalPERS Health Benefits Officer for retirees

14. CalPERS Administrative Costs Lowest in the State Our low administrative costs cover all of the following: • Online enrollment costs • Dedicated member services • Open Enrollment support • Annual Open Enrollment notification process • Health Benefits Officer for retirees Also, participating agencies pay no commissions and there are no commission fees built into the health plan partner rates.

15. CalPERS Board of Administration Board Member Rob Feckner, President Marjorie Berte George Diehr Charles P. Valdes Steve Westly Philip Angelides David Gilb Mike Quevedo Jr. Maeley Tom Kurato Shimada Robert F. Carlson, Vice President Priya Mathur – Elected Member for Public Agency Membership Tony Oliveira – Governor Appointee for Local Government Representative Constituency School Members - Elected Insurance Industry Representative State Employees - Elected Total Membership - Elected State Controller State Treasurer Department of Personnel Administration Public Representative State Personnel Board Total Membership - Elected Retired Members - Elected

16. Employer EngagementYour Voice Health Benefits Constituent Workgroup • Stay informed and provide input • Meets monthly (second Thursday) from 10:00 -11:30 a.m. • Attend in person or via teleconference Contact: Jennifer Rae at (916) 795-2807 or via email at: Jennifer_Rae@calpers.ca.gov Meetings held at: CalPERS, Lincoln Plaza North at 400 Q Street, Room 1140 Sacramento, California Dial-in number for teleconference is (877) 771-5833, Code 784356#

17. Employer Engagement Your Voice (cont’d) Health Benefits Committee and Board Meetings • Generally held the third Tuesday and Wednesday of each month • Agendas available at www.calpers.ca.gov

18. Contact CalPERS The highest level of customer service • Contact us through CalPERS On-Line or our toll-free Employer Contact Center: • www.calpers.ca.gov • 888 CalPERS (or 888-225-7377)

19. CalPERS Health Plan PartnersContacts The following contacts are available to you when you need additional assistance with a specific health plan question: Ann DeRose, Account Manager for Blue Shield HMO N. CA Call 916-329-4567 or email @ Ann.Derose@blueshieldca.com Terri Raymond, Account Manager for Blue Shield S. CA Call 310-568-2813 or email @ Terri.Raymond@blueshieldca.com Mark Johnson, Account Manager for Blue Cross PPO PERS Choice or PERSCare Call 916-636-2181 or email @ Mark.Johnson@wellpoint.com Gladys Stone, Account Manager for Western Health Advantage Call 916-563-2283 or email @ G.Stone@westernhealth.com Josh Costa, Account Manager for Kaiser Permanente Call 916-614-4557 or email @ Josh.S.Costa@kp.org

20. CalPERS Health Care for Todayand Tomorrow CalPERS • Fully committed to our partnership with you • Delivering quality and affordable health coverage