Committee: Raise insurance premiums for state workers, retirees

By Cy Ryan

Thursday, Dec. 18, 2008 | 12:22 p.m.

CARSON CITY – An efficiency committee created by Gov. Jim Gibbons is recommending the more than 30,000 state workers and retirees pay a lot more for their health insurance coverage.

The Spending and Government Efficiency Committee estimates with higher payments the state can save more than $43 million the first year and more than $475 million over the next five years beginning next July 1.

But representatives of university and state retirees said the studies and conclusions reached by the committee were flawed. Jim Richardson, representing the Nevada Faculty Alliance, called the recommendations “draconian” and said it would hurt the efforts to attract and keep good faculty in the university system.

Marty Bibb, representing the retired employees of the state, called the suggestions by the committee “ludicrous.”

The state presently chips in $532 a month for an average employee and the employee pays $28 a month. The subsidy is $874 for families, which pay $143 a month for coverage.

The committee suggested state workers pay about the same premium as employees in private industry. In the case of one casino with more than 100 employees, the worker pays $104 to $323 for the same insurance, according to the committee.

It recommends a survey of companies with 100 or more employees to determine what the premium for state workers would be. The state subsidies would be brought to within 5 percent of the average within the next two years.

The proposal from SAGE would be a hard hit to state retirees. For a retiree, without Medicare, the state provides $366 per month and the individual must contribute $180. Those with Medicare coverage receive a $211 subsidy and pay $73 a month.

The committee voted to eliminate subsidies for anyone who retires after July 1. It suggested reducing the existing subsidies for currently retired state workers by 25 percent next July and another 25 percent in July 2010. And it called for the elimination of all state subsidies for all state retirees who are eligible for Medicare.

Gov. Gibbons has said he would consider the recommendation of SAGE. He has already said there won’t be any pay raises for state workers in the next two years.

The state Public Employees Benefit Board has already voted to lower the subsidies to employees and their dependents by 5 percent to save an estimated $23 million over the next two years.

The board, that governs the state insurance system, has also reduced benefits.

Bruce James, chairman of SAGE, said the recommendation to eliminate all insurance subsidies to anyone who retires after July 1 will slim down the state work force. And that will bring down the state’s payroll, a goal of the governor, James said.

Bibb said a study commissioned by the Las Vegas Chamber of Commerce indicates Nevada has fewer public employees per 1,000 residents than any state in the country.

“If the goal is to get folks to leave the public work force, it is already smaller than anybody’s,” Bibb said.

Former Assemblyman David Goldwater and former Las Vegas Mayor Jan Jones voted against all three proposals.

Goldwater said this was not a program in abstract but affected real people. He added he did not have a problem hitting all new employees with the higher premiums.

Jones said many faculty members in the university system were “in mid-stream” and would be hit with these increases in health insurance premiums.

James said those who retire and have Medicare can get additional coverage for up to $100 a month. But that doesn’t provide dental and vision coverage, as the state policy does.

James also stressed this does not cut the benefits in the present policy. But it does require everybody enrolled to pay more.

More than 26,000 active state workers and their dependents are under the state’s health care insurance. And more than 7,800 retirees are covered.

Cy Ryan may be reached at (775) 687 5032 or [email protected].