CalPERS Announces 2027 Health Plan Premium Rate Adjustments
On July 14, 2026, CalPERS announced its health plan premium rates for 2027, showcasing a 4.97% overall weighted rate adjustment. This moderate increase continues a pattern of steady growth, significantly lower than the 8.21% rise experienced in 2026. The rate hike also remains below the forecasted 9% commercial healthcare inflation for 2027, as projected by PwC.
CalPERS' Chief Executive Officer, Marcie Frost, highlighted their proactive approach in negotiating competitive premiums by demanding accountability for performance and cost from health plans. The average premium changes for 2027 are detailed as a 5.78% increase for Basic plans, a 4.49% hike for Basic HMO plans, a 7.34% rise for Basic PPO plans, and a nominal 0.51% increase for Medicare plans.
Strategic Decisions and Provider Changes
A strategic review led to CalPERS discontinuing its Basic contract with UnitedHealthcare due to substantial discrepancies in proposed rate changes. UnitedHealthcare proposed a 23% increase for its Alliance plan and a 21% rise for Harmony, compared to CalPERS' assessment indicating no necessary increase for Harmony. These proposals could have resulted in an additional $167 million in premiums.
In response, CalPERS introduced Sutter Health Plan as a new HMO option, known for integrated care and high National Committee for Quality Assurance ratings. This addition underscores a focus on affordability and accessible quality care across all HMO plans.
Ramón Rubalcava, chair of the Pension and Health Benefits Committee, commented on healthcare costs’ persistent impact and CalPERS' commitment to competitive benefits. Chief Health Director Don Moulds emphasized the organization's priority of collaborating with plans focusing on affordability and long-term member value.
CalPERS utilizes its purchasing power to align financial incentives with quality improvements through its Quality Alignment Measure Set. This approach positions up to 4% of premiums per plan at risk by 2027, based on performance, which is crucial for enhancing member health outcomes.
Benefit changes and expanded service areas for 2027 complement these strategic moves. Members can review and select plans during Open Enrollment from September 14 to October 9 via the CalPERS website and their myCalPERS accounts, with new coverage commencing January 1, 2027.
For additional details on the 2027 rates and program updates, CalPERS will host a media session on July 14 at 12:40 p.m. PT. Reporters can contact the Public Affairs Office for further access information, underscoring CalPERS’ impact as a leader in health benefit procurement for over 1.5 million members in California. In 2025, CalPERS allocated more than $13.9 billion towards these benefits.