Panel dips into reserves to pay state health-insurance shortfall

Thursday, May 7, 1998 | 10:05 a.m.

CARSON CITY -- Those enrolled in the state government health insurance system may face an increase in premiums or a reduction in benefits.

The Legislative Interim Finance Committee Wednesday allowed the state Committee on Benefits, which oversees the system that covers 27,000 residents, to take $19 million from its reserves to pay for budget shortfalls this fiscal year.

Mikel T. Gray, an actuary that advises the system, told the committee a rate increase is impending because a higher than expected number of claims are being submitted.

Gray works for William Mercer Inc., the consultant to the benefits committee. He could not say what the premium increase might be, adding it will probably be July before a good estimate can be made. The insurance fund is still too volatile to make a firm prediction now, he said.

Assemblyman David Goldwater, D-Las Vegas, said dipping into the reserve means either an increase in premiums or a reduction in benefits.

Goldwater, who noted the state pays the premium for state employees with workers picking up the cost of dependent coverage, questioned where the higher premiums would come from.

Gray responded it was too early to tell and the benefits committee would make that decision in July. He said as of the end of March, the system had paid $27 million in claims and only $31 million was set aside for the fiscal year.

The system has been plagued by a backlog of claims from doctors, hospitals and other medical personnel. Jan Marie Reed of UICI, which pays the claims for the state, said there are more than 40,000 claims more than 10 days old. And there's another 16,000 claims that have been received in the past two weeks for payment.

The goal, Reed said, is to clear up the 40,000 claims received by UICI anywhere from 10 days to 35 days ago by early June.

UICI was hired to pay state claims when the state committee fired L & H Associates for failing to keep up with the pace. At that time there were more than 85,000 backlogged claims and the number kept growing.

Assemblywoman Marcia de Braga, D-Fallon, complained she receives calls from employees enrolled in the system whose doctors or hospital bills have not been paid.

"People are borrowing money ... re-mortgaging their house ... they think it is important to pay the bills."