CalPERS members warned about pharmacy switch, telehealth changes and higher premiums; retirees report coverage gaps
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Summary
CalPERS told members the pharmacy benefits manager will move to CVS on Jan. 1 and that pandemic-era Medicare telehealth flexibilities ended Sept. 30, 2025. Retirees reported denied claims, formulary exclusions and steep out-of-pocket costs.
CalPERS board representative Yvonne Walker announced at a town hall that the system selected CVS Caremark as the new pharmacy benefits manager effective Jan. 1 and said most members will be automatically enrolled in CVS plans (with Medicare members moved to CVS SilverScript where applicable).
"You'll automatically be enrolled in the CVS plan," Walker said, describing the operational change and noting that some Kaiser and Blue Shield plans and certain Medicare Advantage plans (Sharp Direct and UnitedHealthcare) are exceptions.
Members raised multiple concerns during the question-and-answer session. Caller Cena said CVS' formulary will cover only common levothyroxine products by default and that other thyroid medications—including brand formulations—will require physicians to file exemptions at each prescription renewal. "In order to have anything else covered, you need to have your doctor file an exemption petition... Every time your prescription renews is what I was told," she said, adding that the process could be onerous for retirees on fixed incomes.
Another caller, Ryan, described a denied preauthorized procedure after Included Health told him it would be covered; he said his internal appeals were denied and his provider billed him nearly $4,000. Walker said she would have staff follow up and recommended members use the CalPERS contact center to route case details.
Walker also said health premium rates rose about 8% this year overall, with HMOs up roughly 6% and Medicare plans up about 10.78%. She noted that some changes in Medicare funding and narrower telehealth coverage after 2025-09-30 are affecting costs and service availability, and that CalPERS negotiates five-year contracts and includes performance-based surcharges and incentives with its vendors.
CalPERS said members will receive welcome kits in December with ID cards and benefit information. Walker urged members who receive problematic notices from providers or carriers to report them so staff can post clarifications and answers in the Q&A and member communications.
Next steps: CalPERS plans member outreach and Q&A summaries after the webinar; members with unresolved claims were advised to engage the contact center and regional offices for case assistance.