Even as health plans struggle to retain members in a state with one of the highest unemployment rates in the country, moves are under way to redesign health benefits both by the private and public sectors. Blue Shield of California has been approved by regulators to offer a value-based insurance design for the fully insured market – a first in the state. Value-based insurance designs shift some brand-name drugs used for chronic diseases into lower tiers in order to improve patient compliance. CIGNA HealthCare, which hoped to make a big splash in the small-group with its 2008 purchase of Great-West Healthcare, is paring the number of benefit designs for small groups to two in California. Brokers say CIGNA has offered at least eight small-group plans. Legislators are considering a measure that would mandate maternity coverage in all PPO products and another that would eliminate gender rating in the individual market. Meanwhile, the huge CalPERS program has uncovered data showing a rapid increase in the growth of diabetes among its enrollees, a development that is driving up emergency room and hospital admission trends for the disease. Most HMOs in California posted positive net income in 2008 with the exceptions being Kaiser Permanente and CIGNA. Kaiser attributes most of its loss to investment losses.