Our active faculty fall into two categories – those in Kaiser and those in the Blue PPO medical plan. For Kaiser members, the move to CalPERS would have negligible impact. On the other hand, the two-thirds of our active members and their families enrolled in the Blue PPO plan would be impacted by the move. Here’s why:

Active employees in our current Blue PPO medical plan have one of the richest plans available in the country. But regrettably, this is the plan that is at the greatest risk. With our aging demographic combined with continually escalating health care costs, the Blue PPO plan, in its current form, is unsustainable. Changes must be made.

Here’s how a move to CalPERS Choice would affect each group:

Current LACCD Kaiser Members

• No co-insurance, no deductible, and no charge for periodic health exams, immunizations, mammograms, well baby care, or pregnancy.
• Office visit co-payment would increase to $15 from current $10 fee
• HRA dollars would accumulate from year to year

Current Blue PPO Members
The CALPERS Choice plan has  additional out-of-pocket costs for active members using in-network providers:

• A $500/yr individual deductible/ $1,000 family deductible
• 20% co-insurance up to $3,000 calendar maximum for individual, $6,000 for a family. (Note: only 2% of CalPERS Choice members reach the calendar maximum in a given year,)
• No coinsurance on $20 office visits, $20 urgent care visits
• No charge for periodic health exam, immunization, gynecological exam, mammograms, prostate exams, or well baby care.
• HRA money can be spent on the deductible and any co-insurance charges and unspent money accumulates from year to year.

If premiums for our 100% plan continue to increase over the next few years, our plan will change to be more like the CalPERS’s. However, if the LACCD chooses to go into CalPERS this year, before our plan is modified, the difference in premiums will generate $10 - $15 million in savings.

These savings could be negotiated to enhance the salary schedule or to fund Health Reimbursement Accounts (HRA). The following examples assume that all LACCD members of all plans have HRA accounts funded at $1,000/yr for the next three years (the amount of district contributions to HRA accounts in future years would be subject to negotiations) and that the LACCD has joined CalPERS.

Members have different health and financial situations, both while they are actively working and later when they retire.  Those who want to maximize their HRA savings for retirement (Medicare B payments or Long-term Care) may consider Blue Shield HMO plan alternatives, especially if they are currently covering three or more people in our PPO plan.

Scenarios:

If a single faculty member becomes seriously ill, what would be his/her maximum out-of-pocket costs?

• Kaiser - Since there is no deductible and no co-insurance, the cost will be limited to co-pays of $15 on certain services. The dollars deposited in the HRA can accumulate from year to year.
• Blue Shield HMO - same as above
• PersChoice PPO - This plan has a $500 deductible, so the faculty member would be responsible for that amount before the plan takes effect. Once the plan is paying the claim, there is a co-insurance of 20% up to an out-of-pocket maximum of $3,000. Once the maximum is reached, the plan picks up 100% of the in-network costs. The total outlay for this faculty member would be $3,500. The HRA can be used to defray the out-of-pocket costs.

A faculty member and his/her spouse are relatively healthy, and use the health plan only for routine services. What would be their out-of-pocket costs?

• Kaiser - Since there is no deductible and no co-insurance, the cost will be limited to co-pays of $15 on certain services. The $$ deposited into HRAs can accumulate from year to year.
• Blue Shield HMO - same as above
• PersChoice PPO - After each spouse reaches their annual $500 deductible, there is no co-insurance on many preventive care services. Although office visits have a $20 co-pay, there is no co-pay on a periodic health exam, gynecological exam, immunization and well-baby care. Urgent care visits are $20. This couple is not likely to reach their annual out-of-pocket maximums. The HRA will reimburse deductible and co-pay expenses.

A family of four are in an accident and are admitted to a hospital. What would be their out-of-pocket costs?

• Kaiser - Since there is no deductible and no co-insurance, the cost will be limited to co-pays of $15 on certain services. The $$ deposited into HRAs can accumulate from year to year.
• Blue Shield HMO - same as above
• PersChoice PPO - The family deductible is capped at $1,000, regardless of size. The $3,000 out-of-pocket co-insurance maximum is capped at $6,000 no matter how big the family is. In this scenario, this family would likely have a $7,000 out-of-pocket expense. HRA money can be used to mitigate, but it will not fully cover, this family's cost.