Nevada workers enrolled in the state\u2019s health insurance program could see significant plan changes starting in July as the system faces a dire financial situation that officials say is the result of holding off too long on raising premiums.<\/p>\n
The Public Employees\u2019 Benefit Program (PEBP) \u2014 the insurance provider for more than 70,000 Nevada state workers and retirees and their dependents \u2014 is suffering from a \u201cperfect storm\u201d of problems, according to state officials, who haven\u2019t made any decisions on how to ensure the program emerges from a deep deficit but expect to set new premium rates by March.<\/p>\n
The only way to fix the issue is through raising revenue, which raising premiums would do, or decreasing costs, which would mean cutting benefits or changing certain plan terms, said state officials, who added they do not plan on significant program cuts.<\/p>\n
It is not clear yet what the changes might look like, and they could differ depending on the health insurance plan. The program\u2019s board is set to meet in February to discuss different scenarios.<\/p>\n
The program has a decreasing pool of reserve dollars, the state\u2019s funding of the program is decreasing starting in July and more Nevadans are moving to an insurance plan that brings in less revenue to the state.<\/p>\n
It\u2019s all happening against a backdrop of rising health care and insurance costs. And on top of that, the program is operating at a loss financially \u2014 across the first five months of the fiscal year, it was $16.5 million underwater.<\/p>\n
Independent financial analysts determined that premiums would need to increase by 84 percent to cover expected shortfalls in the upcoming fiscal year, but state officials have emphasized nothing is set in stone and that a potential increase was solely meant to illustrate the scope of the budget issue.<\/p>\n
The situation \u2014 which came to light during a January program meeting and a hearing last week before state lawmakers \u2014 reflects the difficulties the state faces in providing affordable health insurance plans to its workers, while also having a program that is able to sustain itself financially.<\/p>\n
\u201cThe way that each of these plans is designed now is not profitable,\u201d Theresa Carsten, the executive officer of PEBP, said at Tuesday\u2019s legislative meeting.<\/p>\n
It also calls into question earlier decisions made by the PEBP board, the program\u2019s decision-making body, which has seen recent turnover. Current members have said the board previously established premiums that were too low, bringing in less revenue to the state.<\/p>\n
\u201cThe votes [were] to keep costs at the largest minimum to the member and not really reflective of what would balance the budget the fastest,\u201d Carsten told lawmakers.<\/p>\n
The program is under the newly created Nevada Health Authority. In the long run, state officials said they are focused on creating a system that is financially sustainable, which could include big-picture changes so the program is not reliant on legislative bailouts.<\/p>\n
Changes to plan terms could be a tough pill to swallow for state workers.<\/p>\n
Trisha Lindauer, who has worked for the state for more than 16 years and now does IT support for the Division of Social Services, said she was \u201cvery frustrated\u201d by the possibility of more changes.<\/p>\n
Because of health issues she faces, Lindauer has met her plan\u2019s out-of-pocket maximum for the past 13 years. Out-of-pocket costs are already set to increase for the upcoming fiscal year.<\/p>\n
\u201cIncreasing the premiums, as well as increasing the out-of-pocket maximums, you would be getting double hits,\u201d said Lindauer, who was speaking as a member of the American Federation of State, County and Municipal Employees Local 4041. \u201cState employees are always the last thought.\u201d<\/p>\n
The situation prompted concerns from groups representing state employees.<\/p>\n
Kent Ervin, a lobbyist for the Nevada Faculty Alliance, a union of higher education employees, told lawmakers on Tuesday that the Legislature must get to the bottom of \u201chow PEBP got to this crisis point.\u201d<\/p>\n
\u201cPlacing the full burden on employees must be avoided,\u201d Ervin said.<\/p>\n
However, any changes made in the coming weeks will have to come at the expense of workers, state officials said.<\/p>\n
That\u2019s because the program is funded through state and employee contributions. The state\u2019s contribution to the program is set during legislative sessions, and the next one is not set to convene until 2027, so the state\u2019s funding share cannot be changed until then.<\/p>\n
How we got here<\/strong><\/p>\n Emerging from the pandemic, PEBP had about $33 million in excess money that it could use at its own discretion. It chose to spend this money across a three-year period to buy down premiums and increase member benefits.<\/p>\n However, there were no corresponding policy changes \u2014 such as premium hikes \u2014 to offset the cost increases.<\/p>\n \u201cOnce that money was depleted, the board continued to select low premium rate options rather than return them to what would have been appropriate to continue to cover the costs of the program,\u201d Casten told lawmakers.<\/p>\n In hindsight, the board should have increased premiums or reduced benefits so that there was more long-term financial stability, said Laura Rich, the former head of PEBP and a current board member.<\/p>\n \u201cWhen you\u2019ve got that much money, you\u2019ve got to do something with it,\u201d said Rich, who is now director of the Department of Human Services. \u201cBut it’s a long-term strategy, and I think this kind of fell off the radar in \u201924-25 where we just didn\u2019t raise those rates.\u201d<\/p>\n Making incremental changes could have avoided the current situation, Rich added.<\/p>\n \u201cI think it\u2019s very important for the board to understand that little tweaks are necessary, otherwise you end up in a situation like this, where you have to make big tweaks, and you\u2019re blindsiding employees,\u201d she said.<\/p>\n There are other driving factors.<\/p>\n In fiscal year 2022, the state rolled out a new type of health insurance plan for employees that has a higher monthly premium but much lower annual deductibles. However, state officials said the plan\u2019s premiums are still too low, bringing in less revenue to the state and attracting thousands of Nevadans.<\/p>\n In the most recent fiscal year, the plan operated at a $26 million deficit.<\/p>\n \u201cWe are in essence putting ourselves in two problems,\u201d said Jim Wells, a board member and former deputy chief of staff to Gov. Joe Lombardo. \u201cOne, we didn\u2019t set the rates correctly. Two, everybody\u2019s moving to a plan that costs more.\u201d<\/p>\n Industry trends aren\u2019t helping either, especially nationwide increases in pharmacy and insurance costs. In Nevada, pharmacy costs for PEBP recipients are slightly outpacing the national averages, which state officials have said is in part because of the emergence of weight loss drugs such as Ozempic, which is covered by PEBP.<\/p>\n And the program is set to experience a drop-off in funding from the state.<\/p>\n Last year, lawmakers approved an increase in state funding for the ongoing fiscal year in an effort to replenish the program\u2019s reserves. However, the increase in funding did not fully achieve that goal, and now there will be a decrease in dollars coming in for the upcoming fiscal year.<\/p>\n What comes next<\/strong><\/p>\n When the PEBP board meets in February, it will be shown different scenarios on changes to health insurance plans to alleviate the financial pickle.<\/p>\n The board is also still deciding on a plan on how the reserve dollars can reach a stable level.<\/p>\n \u201cNone of those are ideal solutions, especially for the participant,\u201d said Assm. Daniele Monroe-Moreno (D-North Las Vegas), the chair of the interim committee that oversees PEBP, \u201cso we need to work on a [new] plan.\u201d<\/p>\n Officials have also emphasized that they are open to larger changes to how the state\u2019s health insurance system works.\u00a0<\/p>\n They do not want to be reliant on the state bailing the program out in the event of financial difficulties and are set to bring in outside experts to conduct research into other potential health care plans.<\/p>\n","protected":false},"excerpt":{"rendered":"Nevada workers enrolled in the state\u2019s health insurance program could see significant plan changes starting in July as…\n","protected":false},"author":3,"featured_media":563253,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[35],"tags":[10874,245839,245840,210,1141,1142,245841,245842,245843,245844,181444,245845,245846,67,132,68],"class_list":["post-563252","post","type-post","status-publish","format-standard","has-post-thumbnail","category-health-care","tag-afscme","tag-american-federation-of-state-county-municipal-employees","tag-daniele-monroe-moreno","tag-health","tag-health-care","tag-healthcare","tag-jim-wells","tag-kent-ervin","tag-laura-rich","tag-nevada-faculty-alliance","tag-nevada-health-authority","tag-theesa-carsten","tag-trisha-lindauer","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116006651505444345","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/563252","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=563252"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/563252\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/563253"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=563252"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=563252"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=563252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}