Consolidation of health coverage recommended

Monday, Jan. 16, 2006 | 8:02 a.m.

CARSON CITY -- In numbers, there is power.

And that could apply in Nevada if state and local governments joined with school districts to purchase medical coverage, a consultant told legislators recently.

Lew Emanuelson, a consultant to the health insurance program for state employees, said consolidation could produce $700 million in premiums, a large enough amount to provide muscle in negotiating for benefits.

Emanuelson spoke last week to the Legislative Committee, which is looking for ways to improve the health care coverage for state workers.

However, his optimism was tempered by Sen. Bob Coffin, D-Las Vegas, an insurance broker, who said that bigger doesn't necessarily translate to savings.

"You can't always get better premiums with a larger group," Coffin said.

Emanuelson of Aon Consulting said there was a possibility of saving a few percentage points by pooling government workers, creating uniform coverage for as many as 122,000 Nevadans.

The state's health insurance program closed the fiscal year $15 million in the red in 2002 and by the same amount the following year. The Legislature dipped into the state treasury both years to bail it out. The program returned to the black last fiscal year.

Assemblywoman Bonnie Parnell, D-Carson City, said that combining the public employees into a single pool would save money by reducing duplication. Currently, each local government and school district has its own staff to administer health care programs. Some of those jobs could be eliminated by combining efforts under a single state organization, Parnell said.

Scott McKenzie, executive director of the State of Nevada Employees Association, endorsed the idea as a way to curtail administrative costs and increase purchasing clout. He said each government would retain the ability to set its own schedule of benefits.

Emanuelson said a study he conducted of health insurance coverage among more than 60 Nevada governments found that costs are lower in Southern Nevada than in Northern Nevada.

On the weighted average, an employee with a spouse pays an average premium of $545 a month in the Las Vegas area. In the Reno-Carson City area, the average is $785 a month. For an employee with family, the premiums averaged $702 monthly in Southern Nevada and $1,064 in the north.

Coffin said the figures provided a "good illustration of what has happened in managed care in the south," where he said governments have already wrung most of the savings possible from the system.

"We have pretty well squeezed it down in the south," Coffin said. "But in the north we have a real problem."

Cy Ryan can be reached at (775) 687 5032 or at cy@lasvegassun.com.