Wednesday, Dec. 11, 2002 | 9:45 a.m.
CARSON CITY -- The state's Senior RX program, providing low-cost insurance to 7,500 elderly, will continue to be managed by a private company for the next five years.
The state Board of Examiners Tuesday approved an extension of the contract with Professional Risk and Asset Management Insurance Service of Brea, Calif., to run the system until 2007.
The state will use $30.6 million of the money it receives from the tobacco settlement to finance the program.
To qualify seniors must be 62 or older, have lived in Nevada at least one year, have an annual income of less than $21,500 and not be eligible for Medicaid.
Those who qualify don't have to pay a monthly premium, but are charged a co-pay of $10 for generics or $25 for preferred drugs or any other drug deemed medically necessary. The maximum benefit allowed per year is $5,000.
Assembly Majority Leader Barbara Buckley, D-Las Vegas, said she would take a look at the contract during the upcoming session of the Nevada Legislature to "make sure we are getting our money's worth."
Buckley had initially wanted the state to operate the program. But she said the state Department of Human Resources had negotiated a better contract to benefit seniors. In the first year, she said, the insurance company was "getting rich" and there was not adequate coverage.
Initially the state paid $1,280 a year for each senior to the private insurance company and a reinsurance firm. But that was reduced to $981, a 23 percent cut.
Mike Torvinen, administrative service officer for the state Department of Human Resources, said the new contract, effective in January, is better for the state.
The contract provides the state will pay a base amount of $1,020 per enrollee per year, but the state actually will reimburse the insurance company on the actual claims per month.
He said those costs are running $64.50 per month per senior. If that continued, the state would pay $774 a year per senior.
Torvinen said this differs from the past contract when the insurance company was required to rebate excess money. Instead the state will be paying the actual cost as it goes along.
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