State health plan facing $11 million deficit in ‘99

Friday, June 26, 1998 | 11:20 a.m.

CARSON CITY -- The trouble-plagued state health insurance program may be facing a $11 million deficit by 1999 and premiums may have to be raised or benefits reduced for the more than 26,000 members.

Sen. Bob Coffin, D-Las Vegas, an insurance agent, said he has never seen anything run so far out of control in his 29 years in the field. "This is beyond belief," he said.

The state Committee on Benefits, which oversees the program, will meet toward the end of July in Yerington to decide what actions to take to stop any deficit.

Randy Waterman, acting state director of risk management, told the Legislative Interim Finance Committee Thursday he does not think the committee will reduce core benefits but there may be some cuts in the fringe benefits.

Mikel T. Gray, an actuary consultant to the committee, said preliminary figures don't show that revenues are going to keep up with the system's expenses.

"I have never seen anything like this in my working career," the 20-year career veteran said.

Assemblyman Lynn Hettrick, R-Minden, said the legislative fiscal staff suggests there may be an $11 million deficit in a year.

The state pays the full monthly premium for its workers which in turn must pay the cost for their dependents.

Waterman, who was astounded at the volume of medical claims being submitted, said his staff will start examining the reasons for the growing numbers.

The system ran into major problems when the private company it hired to process claims fell behind in 1997. The committee fired L & H Associates and hired UICI of Irvine, Texas, to do the job.

Some doctors, hospitals and other medical personnel were not paid for more than a year for treating state workers and their dependents. UICI has almost caught up with the old claims and the benefits committee gave it a new four-year contract earlier this week.