Premiums hiked, benefits cut for state workers’ health plan

Thursday, Sept. 3, 1998 | 10:47 a.m.

CARSON CITY -- An increase of 23.7 percent in premiums plus a cutback in benefits has been approved to stem a $1 million-a-month deficit in the 40,000 member state employees health insurance plan.

"This is unfortunate but necessary," said Robert Gagnier, executive director of the Nevada Employees Association, the union of state workers.

The state Committee on Benefits, which oversees the plan, took the drastic action Wednesday which will hit employees, their dependents, retired state workers and their dependents.

A failure to act would have put the system $18.4 million in the red this fiscal year, which at the current rate could have grown to $31.5 million by 2001.

State Budget Director Perry Comeaux, a committee member, said, "None of this is any fun, ... but we're bleeding to the tune of $1 million a month."

The medicine won't be pleasant. After the 23.7 percent rate increase starting in January, an additional 12.7 percent increase is on the horizon in January 2000 followed by 7.5 percent increases the following two years.

Marty Bibb, executive director of the 7,500 member Retired Public Employees of Nevada, said this will hit those on fixed incomes hard. He added, however, this was better than a proposed 50 percent increase for retirees in January that had been kicked around at a prior meeting.

The state pays the full cost of insurance for an active employee who must pick up the premium for his family. Under the new rates that will go into effect Jan. 1, an employee will pay $211 a month for his family, up from $171. The rates for a retired state employee who is older than 65 with a spouse older than 65 will jump from $114 to $141.

And it's going to cost the members more for hospital stays, doctor's visits and drug prescriptions. The deductible of $250 will jump to $350. That means the employee has to incur that amount of expense before the insurance starts paying.

At present, after the deductible is reached the insurance pays 80 percent of the bills up to $7,500. After that the policy picks up 100 percent. The committee decided the benefit will be lowered to pay 80 percent up to $15,000 before starting to cover 100 percent of costs.

Visits to a doctor's office will rise from a $10 co-payment to $15. Those who get their prescriptions through a mail-order system will pay $15 instead of $5 for a 90-day supply of generic drugs. The price for brand-name drugs goes up to $25 from $15.

Those retired employees who have Medicare also will be hit. At present after Medicare paid its share of the bill, the state insurance picked up the rest. In the future, the retired employee will have to satisfy the $350 deductible before the state policy kicks in. And only 80 percent of the remaining bill will be paid instead of the present 100 percent.

The committee decided to eliminate any coverage for fertility drugs or Viagra.

Comeaux said, "We're not thrilled with any of these changes."

Representatives of the employee and retiree groups agreed.

Gagnier said the system lost $19 million in the "L&H fiasco," referring to a company that was hired by the benefits committee to pay the bills of doctors, hospitals and medical personnel who treated employees, dependents and retirees. L&H Administrators was fired after it fell behind in paying the bills.