Governor warns of troubles with state's health insurance

CARSON CITY -- Gov. Bob Miller Thursday urged a state committee to take immediate action to solve the deteriorating financial condition of the state's health insurance program which is estimated to be more than $8 million in the red.

Miller said in a news release the state Committee on Benefits must take drastic actions at its meeting Tuesday -- either to increase premiums or reduce benefits to the 25,000 state employees and their dependents covered under the state program.

"The committee must find a means by which the fund can again become stable," the governor said.

He went on to say that if the committee does not deal with reality immediately "it would be irresponsible and detrimental to the state and our employees."

Two years ago, the trouble-plagued system hired L & H Administrators to process and pay claims from doctors, hospitals and health professionals for treatment of state workers and their dependents. L & H fell behind in paying the bills and was fired. A new company, UICI of Texas, was hired but because of the late payments, the state lost its discounts from these medical providers.

The governor said even with a prompt action of the committee next week, the system will probably require a supplemental appropriation from the 1999 Legislature to carry it through this fiscal year.

Miller's concerns weren't cordially received by Jeanne Adams, chairwoman of the committee.

"I don't know where the governor has been for the last year and a half," she said.

Adams, who lives in Las Vegas, said the committee spent three days in Yerington in July discussing options including raising the $250 deductible, reducing coverage and boosting premiums. Action is expected to be taken at the Sept. 2 meeting in Carson City.

The state contributes the full monthly premium for its employees who must pay the tab for their dependents. Adams said rates haven't been increased in three years while prices have continued to rise.

"Any action we take will not be pleasant," she said. "We will be criticized."

Mikel Gray, the actuary for the system, estimated in July the system would be $8.8 million in the red this year and potentially $14.8 million next year if nothing changes. Gray said Thursday a new financial projection will be presented Sept. 2.

"It's not getting less grim," he said.

archive