Las Vegas Sun

September 22, 2014

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State insurance plan faces $100 million shortfall

74,000 enrolees face major cutbacks in benefits

CARSON CITY — There’s a gaping $100 million hole in the health insurance plan that covers state workers, retirees and their dependents. And the 74,000 enrollees are facing major cutbacks in benefits.

“This is grim news,” said James Richardson, who headed the insurance plan seven years ago.

Kateri Cavin, operations officer of the Public Employees Health Program, said budget officials project the amount the state will contribute the next two fiscal years will be flat.

Cavin said medical inflation is expected to rise 11 to 12 percent per year and that puts the shortfall at $90 million to $100 million for the biennium.

The state is going to be an estimated $3 billion short in its coming two-year budget, and both candidates for governor say they don’t approve of new taxes to cover the pending deficit.

The program board meets Thursday to start taking a look at what can be reduced to stay within the budget.

“We’re putting it all on the table,” Cavin said.

Martin Bibb, representing the Retired Public Employees of Nevada, said he doesn’t want to see premiums increased so much or the deductible increased so high that retirees cannot afford the plan.

“This is a huge concern to retirees,” said Bibb, who noted that the Legislature in the 2009 session cut $53 million from the plan and shaved $25 million again in a special session this year.

The state subsidizes the premiums of its employees at 84.8 percent and for retirees and dependents at 57 percent. It has an annual budget of more than $500 million.

Richardson, who represents the Nevada Faculty Alliance in the university system, said, “This makes the Sage Commission look like a Sunday School picnic,” referring to a report that suggested major cutbacks in the state insurance plan.

Some of the approximately 40 suggestions to be considered include doubling the deductible for family coverage, eliminating co-payments and cutting all lab coverage at hospitals for certain procedures.

On the table are scrapping routine vision benefits except for annual eye exams and limiting dental cleanings to two per year. There is also a suggestion to eliminate coverage for spouses or domestic partners with other employer coverage.

The program board will take testimony on Thursday at its Carson City meeting that will be televised to Las Vegas. It will start making decisions Aug. 5.

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