Benefits changes OK'd by Assembly committee

The Nevada Assembly Ways and Means Committee on Friday joined their Senate counterparts to finalize a plan that will put back the health benefit premium structure used for state workers this year.

That means plans to commingle Medicare-eligible retirees with all other participants - which forced their premiums up significantly - have been tossed out.

Mike Hillerby, Gov. Kenny Guinn's chief of staff, told the committee Medicare-eligible retirees will see some increase over what they paid in 2004, but not the huge spike in premiums they were facing.

He admitted the increase to $391 for a Medicare eligible retiree and spouse looks large compared to the $234 total this year but pointed out this year's rates were artificially low to reduce an oversized surplus.

He said a better comparison is to the $312 out of pocket paid by the couple in 2003. All those totals include the amount those retirees pay for Medicare Part B coverage as well as the state premium.

Hillerby said the proposal will require the plan subsidize those retirees for the next two years to keep everybody else's rates from jumping upward. That subsidy will cost $4.85 million.

He said the total premiums for Medicare-eligible retirees are similar to those in the compromise proposal developed last week. But that proposal, he said, caused increases in premiums for 20,000 other participants in the plan. He said this version with the subsidy makes additional increases for those other participants unnecessary.

In the interim, he said, the executive branch will study the best way to permanently fix the Public Employee Benefits Program.

He said there are only about 3,000 Medicare-eligible retirees in the plan now but that number will increase significantly over the next few years since nearly everyone now approaching retirement is Medicare eligible.

"It's our commitment that over the next two years will study how to handle this," he said.

He said the proposal would "do the least long-term damage" to plan participants while that study is undertaken.

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