Rising prescription drug use forcing state to cut health benefits

By Cy Ryan

Thursday, Feb. 3, 2011 | 2:05 a.m.

CARSON CITY — Benefits are being cut to the 43,500 members in the state Public Employees Benefits Program, and part of the reason is the increased use in prescription drugs.

Jim Wells, executive officer of the insurance program, told a legislative budget subcommittee Wednesday that prescription costs are soaring due in part to extensive advertising by pharmaceutical companies.

“The clients want to try the newest and latest drug,” said Wells. “They believe there is always a pill cure.”

The cost of drugs to the system has jumped 81 percent, to $47 million from 2006 to 2010, and the average person is on 1.5 prescriptions per month.

To keep the present benefits and subsidies in the system, it would cost $85.2 million, and employees would face an increase of about $200 a month each.

Of the 43,500 people in the health insurance system, 26,000 are state workers. The rest include such units as local governments, universities and charter schools.

Some of the cutbacks include increasing the deductible for an active employee from $800 to $1,200 and a family from $1,600 to $3,800, and reducing life insurance payouts for an active worker from $20,000 to $10,000. Dental benefits also are being reduced.

Retired employees who also have Medicare coverage would be transferred out of the system and be able to choose private insurance plans.

The new federal health care reform law will also require the system to make changes. For instance, children are now covered up to their 19th birthday and up to 23 years old if they are a full-time student. The new law will require coverage of children up to 26 years old.