Fixing retiree premiums probably up to lawmakers

Members of the Public Employees Retirement Program board concluded Tuesday any rate cut for Medicare eligible retirees this coming plan year pretty much depends on the Nevada Legislature.

Executive Director Woody Thorne is scheduled to appear before the general government subcommittee this morning to discuss what can be done about the premium increases those members of the state plan face beginning July 1. For a retiree and spouse, the increase is nearly $300 a month and the 687 couples in that situation have complained loudly to their legislators, the governor's office and PEBP.

Board members David Smith and Jacque Ewing-Taylor both said changing rates now for the upcoming plan year is nearly impossible because open enrollment is under way.

"We can't do this now," said Taylor. "To make substantial changes in the next 21 calendar days, I don't think it's possible, and I don't think it's wise either."

"We can't be changing things in the middle of open enrollment," said Smith.

He said subsidizing rates for those people hardest hit by the new rates would require lawmakers to either appropriate the estimated $3.2 million needed or to authorize PEBP to use part of its reserves for that purpose.

They, along with board member Ron Swirczek and nearly every retiree group at the meeting, said a full-scale study of all options to fix and stabilize the plan is the long-term answer.

Thorne said the problem occurred when all participants in the plan including Medicare eligible retirees were "commingled" to give them the same rates and options. He said that meant the state could not give them the break they have been receiving due to the fact that Medicare pays most of their medical bills. He advised employee representatives that's not possible under their interpretation of current law.

Marty Bibb, of Retired Public Employees of Nevada, said the goal has to be to recognize that Medicare-eligible participants cost the state plan less because Medicare pays the first 80 percent of claims and give them reduced rates while still commingling them with all other participants for access to such things as catastrophic coverage, vision, dental and life insurance.

Thorne said if lawmakers approve funding to fix the problem this year, it's possible he could avoid lengthy delays in implementing the rate changes for that group that would come from re-opening enrollment. That process requires several months under state and federal law.

Instead, Thorne said he could issue a letter advising participants in that group they could exercise a new "option" for coverage.

The issues will be discussed in the Senate Finance-Assembly Ways and Means General Government subcommittee this morning.

n Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.