Two seniors drug plans competing

Tuesday, May 8, 2001 | 10:01 a.m.

CARSON CITY -- Gov. Kenny Guinn says improvements in his senior citizen prescription drug program will see enrollment go from 242 people to 7,000.

But senior citizen groups and others testified Monday they favor an alternative Democratic plan that would be run by the state, rather than private companies.

The Assembly Health and Human Services Committee heard nearly three hours of testimony but did not vote. The decision is likely to be made by Guinn and Majority Leader Barbara Buckley, D-Las Vegas, who has authored the rival plan.

They have been in negotiations for weeks.

Michael Hillerby, a senior aide to Guinn, said the main difference comes down to a potential $27.5 million risk that may fall upon the state under the Buckley plan. But Buckley has an actuarial analysis of her plan showing it will have a surplus after one year.

Senior RX, Guinn's program, was authorized by the 1999 Legislature using money coming from the tobacco fund. Started in November only 242 seniors have signed up with the insurance company for coverage.

Those under 62 with incomes less than $21,000 now receive a subsidy for their premium payments to the insurance company. Guinn wants to provide higher subsidies, eliminate the $100 deductible and examine whether more prescription drugs can be offered.

Guinn would spend $7.5 million a year for covering up to 7,000 people. The maximum benefit is $5,000. Hillerby said that has a potential liability of $35 million for the insurance company, minus the premium payment, and that the state does not have the money to cover that large a deficit.

But Buckley said the private insurance company would merely raise rates or decrease benefits or drop the contract with the state.

Her plan calls for a state-operated system in which the individual would pay no premiums and would have lower co-payments.

She produced an actuarial analysis of her program by the national firm of Milliman & Robertson Inc. showing that her proposal would have a $42,000 surplus after one year.

Buckley's plan drew support from a Nevada member of the Silver Haired Congress, the Nevada Women's Lobby, the Nevada League of Women Voters and the Alliance for Retired Americans.

While careful to praise Guinn for starting the program, representatives of the groups suggested the Buckley plan was better for senior citizens.

But Martha Spenny, representing the Council for Affordable Health Insurance, said Guinn's plan offers the "best long-term solution."

It puts the risk on the insurance companies, said Spenny, whose council represents insurance companies.

Deb King of the state Department of Human Resources said the insurance company in the program now has suffered a 40 percent loss because of the lack of sign-ups. She and Hillerby estimated the company, Fidelity Security Life Insurance Co., of Kansas City, Mo., would need 5,000 enrolled to break even.