CalPERS Prunes Its Health Insurance Rolls on the Eve of Obamacare

Monday, August 26, 2013
Michael Moore (credit: promo for movie Sicko)

Every day brings new stories of people scrambling to obtain or hold on to the precious insurance that opens their access to health care, and a decent life, in California and the nation.  

When the California Public Employees’ Retirement System (CalPERS) announced that its three-month amnesty, which ended June 30, removed 6,700 ineligible dependents from the insurance rolls, it was generally greeted with enthusiasm for having purged scofflaws and the undeserving from the ranks of the fortunate, with little regard for what fate awaits them.

Now CalPERS has launched a series of audits to scrub thousands more of them from the insurance rolls of the nation’s second-largest purchaser of health insurance. They expect to kick another 22,000 “fraudsters” and the error-prone out of the system, according to the Sacramento Bee, including ineligible domestic partners, children who got too old, former spouses and the like. They will either migrate to less generous, more expensive insurance programs or simply go without.

Based on higher-than-expected disqualification numbers so far, CalPERS, which spends $7 billion a year on medical benefits for its 1.3 million employees, retirees and their dependents, is projecting annual savings of $177 million a year. 

The independent audit will require CalPERS members to prove that their claimed relationships are valid, a process that is sure to engender hostility. Sara LaVallee, an executive at a company that audits employers’ health insurance rolls, told the Sacramento Bee that a third-party will “end up chasing down” the wrong-doers because “from the employers’ perspective, there’s an element of not wanting to be the bad guy.”

Health care audits have been a booming business for more than a decade.   

Many of those booted out will probably end up in Obamacare, that much-derided attempt to insure the uninsured and uninsurable, while trying to stabilize rates and provide insurance industry transparency in a national program of outreach through the Affordable Care Act. The effort itself has drawn the scorn of many, and outright resistance from more than a few states, who feel that health care shouldn’t be provided as a human right or a compassionate gesture.

They either deny there is a problem with receiving health care in America, argue that the nation can’t afford health care for all, blame the uninsured for their fate, decry the interference of government in people’s lives, believe the marketplace is a more efficient mechanism or simply resist change. The result is finger-pointing and demonization over simple attempts to make people’s lives less difficult and less painful.

There is little, if any, discussion in the U.S. about the type of single-payer health care systems (pdf) that have helped deliver lower-cost, higher-quality care to people in countries around the world.

Obamacare health exchanges, including Covered California in this state, are scheduled to open in October, revealing for the first time what options people will have for purchasing insurance. They will have until January 1 to sign up or face a financial penalty because being without health care isn’t penalty enough.

–Ken Broder


To Learn More:

CalPERS Audits Will Revoke Coverage for Ineligible Dependents (by Jon Ortiz, Sacramento Bee)

6,700 Ineligible Dependents Dropped During CalPERS Insurance Amnesty (by Jon Ortiz, Sacramento Bee)

Single-Payer Health Care Debated at Senate Hearing (by Noel Brinkerhoff, AllGov)

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