Guinn proposes major changes in state health plan

Thursday, Nov. 1, 2001 | 9:02 a.m.

CARSON CITY -- Gov. Kenny Guinn is suggesting some sweeping changes in the health insurance plan that covers 50,000 state workers, their dependents and retirees.

The governor said members should have a choice as to what coverage they want, rather than having one policy that applies to everyone.

"We have to be flexible," Guinn told Forrest "Woody" Thorne, executive director of the state Public Employees Benefit Program, which manages the state system.

The governor's comments came at a meeting of the state Board of Examiners, which approved a $50 million contract for Catalyst RX of Las Vegas to manage the state's pharmacy program for the next three years.

Thorne said 20 to 25 percent of the monthly premium collected by the system goes to pay for drugs, Thorne said. And pharmaceutical costs are one of the fastest growing in the system.

The state has allocated $345 million this biennium for insurance premiums for state workers who must pay for coverage for their dependents. Part of the $345 million also goes to subsidize some of the premiums for retired state workers.

The Legislature allocated $357 a month per employee for health coverage this year. That will increase to $384 next fiscal year.

The system raised the premiums for dependents and retirees an average of 7.8 percent starting in January. Guinn praised Thorne for holding the increase down, adding that some policies were going up by 30 percent. In Las Vegas, rate increases by private insurance companies may exceed 20 percent.

Insurance officials say the rates may rise faster in Las Vegas due to a lack of hospital beds. The state, said Guinn, has to encourage hospitals to locate in Nevada. He said this may be done by giving them extra incentives to build.

The governor focused on providing state workers a "cafeteria" type insurance program, allowing the employee and his dependents to pick and choose. Basic coverage would be required, but the employee may want to forego vision or dental policies, now included in the state plan.

They may want to use that savings for child care.

Thorne said the board of directors of the system is looking at changes. Under consideration is scrapping vision insurance, which covers eye examinations and glasses, he said.

Providing the flexible system advocated by Guinn may be difficult, Thorne said. There are five major payroll centers, plus the one at the University and Community College System of Nevada. Those would have to be integrated before the cafeteria plan could be started, he said.