HMO complains state plan unfair

Thursday, Sept. 27, 2001 | 10:47 a.m.

CARSON CITY -- A health insurance company in Las Vegas that covers 4,600 state employees says state policies are driving it out of business through the use of discriminatory pricing practices.

John Bunker, president of Health Plan of Nevada, has complained to the Legislative Interim Finance Committee that the state insurance plan is taking the savings from his company and using the money to subsidize rates in the state plan.

But P. Forrest "Woody" Thorne, executive officer of the state's self insured plan, said it was following the law in trying to hold down big increases in premiums starting in January 2002.

The state plan covers more than 50,000 state workers and their dependents. Two private health maintenance organizations in Las Vegas -- HPN and Pacific Care -- compete with the state.

Bunker told the finance committee that the rate HPN charges a single employee saves more than $90 from the state appropriation, but that the savings is taken away from the company and applied to the rival state plan.

He called the plan by the state "blatant discrimination," and that savings by HPN could be used to reduce dependent rates charged by the company.

The board of directors of the state plan raised dependent and retiree rates an average of 7.8 percent, starting January 2002. But HPN had to boost rates anywhere from 16.8 percent to 43 percent for dependents and up to 46 percent for retirees from the state.

This decision, Bunker said, is an attempt to eliminate the private managed care plans from covering the state workers.

But Thorne said the direction of the Legislature was to smooth out the rates, so there would be no major increases in premiums.

Thorne said the system must remain solvent, and he did not want to return to the Legislature asking for a $26 million bailout, as happened in the 1999 session.

Bunker said the decision by the state board means the employee who takes HPN or Pacific Care has to pay more to cover dependents. "It's driving us out of the picture," he said.

Assemblywoman Chris Giunchigliani, D-Las Vegas, agreed with Thorne, and said she didn't want to see the state plan go into the red $26 million. But she suggested that it was inappropriate for the state to take the savings from the two private health insurance plans.

"This is causing the private employer rates to be higher," she said.

Sen. Bob Coffin, D-Las Vegas, suggested the problem arose because the Legislature did not put enough money in the health plan.

"It was an inadequate budget," he said.