Don't be surprised if an Assembly hearing next Tuesday gets a tad heated.
The Aging and Long-Term Care Committee will convene to talk about huge premium hikes on private insurance policies CalPERS sold and administers to cover things like nursing-home and residential care.
Assemblywoman Mariko Yamada, the Davis Democrat who chairs the committee, announced the hearing Tuesday, just as CalPERS issued official notices to policyholders that a 5 percent premium hike is coming.
Then there's the 5 percent bump next year. And a whopping 85 percent hike spread over two years starting 2015.
The increases apply to CalPERS policies sold from 1995 through 2004 that increase benefit payouts each year to counter inflation, plus lifetime coverage.
CalPERS said – but didn't guarantee – that the premiums wouldn't go up.
But by 2003, the program was hemorrhaging money. The fund raised premiums 30 percent. More rate hikes followed. CalPERS stopped selling the gravity-defying policies in 2004 in favor of more realistic plans with limited benefits.
Fund officials say the new round of premium increases, along with investment policy changes it has made will stabilize the program, but they stop short of guaranteeing no more rate hikes.
Yamada's office has heard plenty from angry policyholders such as Brenda Turley, a 68-year-old retired state worker who bought coverage 18 years ago.
Her premiums started at $77 per month, she said, and now they're nearly $200. She's switching to a policy with 10-year coverage and no inflation protection because she can't afford the $400 per month her current plan will eventually cost.
"I'm beyond angry," she said Wednesday.
Doug Arnold, whose state career included a stint as interim director for the Department of Mental Health, said he doesn't expect CalPERS to reverse its premium increases.
"The best we can hope for is to come away with confidence that plans in the future will work," he said.
Arnold and several other retired state executives met with Yamada last month.
"We got some sympathy to what our concerns were," he said.
Rates throughout the relatively young long-term care industry have been volatile as insurers try to make up for underestimating their costs. Last year Gov. Jerry Brown signed a Yamada bill intended to protect policyholders from wild premium swings. It didn't apply to CalPERS.
Yamada's long-term care committee will bring in fund officials, industry experts and – here's where things could get emotional – policyholders and retirees. They'll talk about industry trends, its future and CalPERS' coverage in particular.
"Where is the hearing?" Turley asked, then wrote down the details: Tuesday, the Capitol, Room 127, at 2 p.m.
"I'll be there," she said. "Bet I'm not the only one."