State workers may see big hike in health plan

CARSON CITY - A potential change in Nevada's state health insurance plan could mean major increases in monthly premiums for retirees - some as high as 32 percent.

''This is absolutely a killer for retirees,'' says Marty Bibb, executive director of the Retired Public Employees of Nevada.

The change, proposed by a new actuarial consultant for the public retirement system, would split active state workers from retirees when computing losses and setting rates.

Since those on pensions traditionally have higher medical bills, their premiums could escalate more rapidly than those of younger, active workers.

The board of directors of the Public Employees Benefits Program heard the proposal from consultants of the Segal Co. and will meet later this month to decide whether to follow the advice.

The consultant was hired by a new board of directors put in place after the health insurance plan approached insolvency last year. The Legislature had to pump $26 million into the system to keep it afloat.

There are 15,000 active workers covered by the system, and about 5,000 retirees, not including dependents.

''This drives a wedge between active and retirees,'' said Bob Gagnier, director of the State of Nevada Employees Association. ''We hate to see that.''

But Gagnier said that if the rates aren't increased for retirees, then active workers would face higher premiums for their family members.

Segal proposed a 9.8 percent increase in premiums for active state workers effective July 2001, at a cost to the state of $15 million over the next two years. The state pays the total premium for its workers, but employees pick up the cost for family members.

The Segal recommendation is a 4 percent increase for dependents, which Gagnier estimates at between $5 and $10 a month.

Under the Segal plan, the insurance premium for an early state retiree and spouse would jump 21 percent from $651 to $789 a month. Retirees with children would go from $596 to $789 a month, or 32 percent.

State retirees with Medicare would see a 1 percent drop in the monthly premium to $226, while those with spouses would get hit with a 21 percent increase.