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Average 9.6 percent increase expected in 2013

California Public Employees' Retirement System, the third-largest purchaser of health benefits in the country, said its health premiums next year are expected to increase 9.6 percent on average for nearly 1.3 million members.

These recommended rates from the CalPERS pension and health benefits committee await full board approval Wednesday. If adopted, the rates for various health plans would take affect Jan. 1.

Premiums at CalPERS rose 4.1 percent this year and 9.1 percent in 2011. CalPERS said the 2013 increase would amount to an additional $30 per month.

"We introduced a number of initiatives over the past three years to help stabilize rates, but today's rates reflect the overall continuing upswing of healthcare costs," said Priya Mathur, chairwoman of the pension and health benefits committee.

CalPERS spends nearly $7 billion annually on medical care for active and retired state and local government employees and their family members. Cal-PERS is the largest healthcare spender in California and trails only the federal government and General Motors nationally.

The proposal Tuesday includes increases of 8.7 percent for HMO plans and 13.9 percent for preferred-provider plans. The committee said Medicare plans would see a decrease of 10.5 percent

CalPERS negotiates rates with three of the state's biggest health plans: Blue Shield of California, Kaiser Permanente and Anthem Blue Cross, a unit of WellPoint Inc.

During the recession, the growth of healthcare spending nationwide slowed. National healthcare spending grew less than 4 percent in 2009 and in 2010, according to government figures, the lowest rates in more than 50 years.

A new government estimate released Tuesday echoed that trend, predicting a 3.9 percent increase in spending for 2011. But federal officials said growth is expected to pick up again.


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