State insurance plan’s rate increase questioned

Thursday, Sept. 24, 1998 | 10:52 a.m.

CARSON CITY -- Legislators and union officials expressed fear Wednesday that children and retirees will be hurt the most when rates are increased by almost 24 percent in the trouble-plagued state health insurance plan in January.

And the lawmakers and union representatives want more answers about how the plan, which had a $26 million reserve, can slip to $1 million in the red within one year.

The plan faces a $12.5 million deficit at the end of this fiscal year.

The Committee on Benefits, which oversees the health insurance program covering about 40,000 people, voted earlier this month to boost premiums for dependents of state workers and for those who have retired in the state system. The premium of state workers is paid by the state but they must pick up the cost for their dependents.

Gary Wolff, representing a coalition of unions representing state workers, told the Legislative Interim Finance Committee the financial problems are due to the "incompetence and poor management" by the benefits committee. He asked the legislative committee to order an investigation.

He said single mothers, who work for the state, won't be able to afford to insure their children and retirees also will be hit hard.

Senate Majority Leader Bill Raggio, R-Reno, questioned the theory in boosting rates for retirees from the state since "they are the least able to bear the cost."

Glenn Meister, the actuary for the insurance program, said retirees have the highest claims cost. Meister, who works for the William Mercer Co., said the benefits committee decided on a uniform increase.

The benefits committee intends to ask the 1999 Legislature for a loan of $12.5 million to tide it over until it can return to solvency in about four years.

Assemblywoman Kathy Von Tobel, R-Las Vegas, whose husband will get hit with the premium hike because he is retired from state service, called the increase ridiculous. She asked the system to track how many people will be forced to drop the insurance because of the rising premium.

Assemblywoman Jan Evans, D-Sparks, said the issue of the solvency of the fund was raised last winter and she wondered why it took the benefits committee until this month to take action.

"Now we have to take a big hit," she said.