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State Employees Get Hit With Higher Health Care Costs

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(Sacramento, CA)
Wednesday, June 16, 2010
Declining state revenues have made for a couple of tough years for public employees. There have been  layoffs, furloughs, and the looming prospect of pay cuts. Now, after a CalPERS decision Wednesday, those employees are assured 20-11 will require more penny pinching on their part.

Clark McKinley, a spokesman for CalPERS, says the increase is needed to curb rising medical costs.

"Everybody is facing difficulty with stagnant wages," McKinley says. "Inflation is running two to three percent a year, and this [rate increase] is basically reflecting what's happening in the market place."

CalPERS negotiates rates with several healthcare providers, including Blue Shield. State employees will be paying as much as 16 percent more for that coverage. Several state employee unions negotiated with CalPERS to determine the rate increase.

The rates CalPERS negotiates are often a benchmark for large companies and organizations that provide health insurance in California.  
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