Health insurance needs $26 mil. bailout

Friday, Jan. 29, 1999 | 11:25 a.m.

CARSON CITY -- The state's health insurance program, which covers 47,000 employees and their dependents, needs an immediate $26 million bailout, legislative budget committees were told today.

Randy Waterman, acting manager of the state Risk Management Division, said there was a "dire need to get an infusion of money," for the system to pay its bills through June 30.

In two years, the program slipped from a healthy reserve into the red because of problems with a firm that paid claims and an unexpected rise in the number of claims from employees and their dependents.

To stop the increasing deficit, the Committee on Benefits, which oversees the system, cut benefits as of Jan. 1 and raised the premiums for dependent coverage an average 23.7 percent. It plans to increase premiums for dependents by 12.7 percent next January and than by 7.5 percent in each of the two following years.

The state pays the full premium for its employees who pick up their dependent rate. The committee is proposing the state increase its contribution by 23.7 percent on July 1 and than by 12.7 percent in July 2000.

Mike Gray, an actuary for the system, told the Senate Finance Committee and the Assembly Ways and Means Committee that by the end of the fiscal year 2001, there should be a surplus of $5 million. And at that time, the system can start paying back the state for the money it will advance.

Gov. Kenny Guinn has included the bailout money in his budget.

Waterman said if the system does not get the money at least by the beginning of April, it will encounter "serious problems."