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September 18, 2014

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Gibbons’ budget hits retired state workers hard

State of the State 2009

State of the State, part 2

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  • State of the State, part 2
  • State of the State, part 3
  • State of the State, part 4
  • State of the State, part 1
  • State of the State, part 5
  • State of the State, part 6

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CARSON CITY – Gov. Jim Gibbons’ budget would take a major toll on more than 8,700 retired state workers.

In his budget, the governor is suggesting the premiums for retired state workers be raised by more than 100 percent.

The governor adopted the recommendations of the Spending and Government Efficiency Commission to cut back existing insurance subsidies for retired state workers by 25 percent in July and by another 25 percent in 2010.

State workers and retirees can’t be certain about how much they will be affected until March, when the state’s insurance system sets its premiums. But Martin Bibb, executive director of the Retired Public Employees of Nevada, says the retired state workers will face a “huge” increase under the governor’s budget. His estimates are that the premiums would be $87 more a month the first year and double that the second year for a single retired employee with 15 years of service, and $400 more a month for coverage of a retiree and spouse.

“It will have a devastating impact,” says Bibb.

Bruce James, chairman of the SAGE Commission, said the state employees now receive a “very generous subsidy” for their insurance coverage. One of the issues here, he said is the state worker who retires before he reaches the age to qualify for Medicare. The state employee continues to be carried on the state insurance and still gets the subsidy. In private industry, the person who retires before qualifying for Medicare has to pay for his own coverage until he becomes eligible for the federal program.

Even if the Legislature adopts the governor’s recommendation, the state will still be paying half of the premium, James said. He said SAGE wanted to come up with a recommendation that is fair to taxpayers and fair to state employees.

Gibbons is recommending eliminating all health insurance subsidies for anyone who retires after next July. And his suggestion would eliminate all subsidies for all workers who are eligible for Medicare coverage.

For a retiree with 15 years service and without Medicare, the state now provides $356 a month and the individual must contribute $131. If the governor’s proposal was in force, the individual would contribute $219 a month next year and $307 a month in fiscal 2011, says Bibb.

A state worker who retired with 15 years of service now pays $452 a month for coverage for himself and a spouse. The state subsidy is $689 a month. Under the governor’s proposal, the out-of-pocket payment would go to $625 the first year and $791 a month the second year.

Those with Medicare coverage receive a $211 subsidy and pay $43 per month. The worker would have to pay the $211 to keep the state insurance. An employee with Medicare now pays $201 a month for coverage for himself and a spouse. That will jump to $604 a month, according to Bibb.

The state started contributing to Medicare for new employees in March 1986.

Bibb says retirees “will have to make a difficult choice. Some people can’t afford this.” He noted the insurance system already cut benefits to save about $50 million.

But Gibbons is budgeting an additional $2.4 million to pay for increased enrollment in the Senior Citizen’s Property Tax Assistance program. The governor did keep the Senior Citizen’s Property Tax Assistance at its present operating level. He has put enough money in the budget to handle the expected growth of 17,146 to 18,777 next fiscal year and 18,859 in fiscal 2011.

There is $12 million budgeted for the program over the coming two years. Participants must be at least 62 years old, not have an income of more than $28,058 and their home must have an assessed value of more than $30,000.

Mike Willden, director of the state Department of Health and Human Services, said the budget provides for a restoration of the grant. The average grant was reduced by $40 this year to help eliminate the deficit in the budget. Willden said the proposed budget restores the average grant to $340, if the number of applicants doesn’t exceed the estimates.

In other senior citizens programs, the governor adds $150,000 to the Home and Community Based Program that keeps seniors in their homes rather than in nursing homes. This is enough to keep an additional 36 seniors in their homes next year and 72 the following fiscal year.

But the governor is reducing the pay to the personal care assistants from $18.50 an hour to $15.50 an hour.

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

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