CalPERS approves 2027 health‑plan changes; members urge action over Kaiser strikes and PBM transition
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Summary
CalPERS trustees approved staff proposals to separate pharmacy from medical for a Blue Shield Medicare Advantage product, expand Blue Shield EPO coverage into 51 ZIP codes, and pursue Kaiser service expansion into northwestern Nevada; public commenters urged CalPERS to press Kaiser over strike‑related access issues and staff outlined the upcoming PBM transition to CVS Caremark.
CalPERS’ Pension & Health Committee on Nov. 18 approved three staff recommendations to be incorporated into the 2027 rate development process: separating Blue Shield’s Medicare Advantage pharmacy benefit from its medical product, expanding Blue Shield’s EPO into remaining California ZIP codes without HMO coverage, and pursuing an expansion of Kaiser Permanente’s basic HMO and Medicare Advantage service area into northwestern Nevada pending regulator approvals.
Rob Jarsmosek presented the proposals and explained the rationale: separating pharmacy from medical for the Blue Shield Medicare Advantage plan could change CMS risk‑score calculations and potentially increase federal reimbursement that would lower premiums for members; EPO expansion aims to increase access in rural ZIP codes; and Kaiser’s Nevada entry is contingent on state and federal service‑area approvals.
Staff cautioned that SB 729 — a state law requiring infertility diagnosis and treatment coverage in basic HMO plans effective July 1, 2027 — introduces uncertainty around cost and implementation pending guidance from the Department of Managed Health Care (DMHC). CalPERS is evaluating HMO implementation first and may consider PPO options later.
Public comment at the meeting focused heavily on Kaiser labor disputes and continuity of care. Nurses, union leaders and other CalPERS members described service disruptions during recent strikes and urged the board, as a major purchaser of Kaiser services, to press the health system to negotiate fair labor agreements to protect member access. CalPERS staff said the agency traditionally remains neutral in bargaining but engages plans to confirm continuity‑of‑care plans and enforces policies to avoid members being used as bargaining leverage.
Separately, staff reported continued preparatory work for the PBM transition to CVS Caremark effective Jan. 1, including member communications, specialty drug outreach and bilingual support on request. Staff said no members will experience a lapse in drug coverage during the transition and that letters and outreach to members and prescribers will be sent where formularies are changing.
Trustees approved the staff recommendations by voice vote; staff will incorporate approved changes into next spring’s rate‑setting process and pursue regulatory approvals where required.
