Nevada employee benefits stoke north-south tension

CARSON CITY -- An internal rivalry took center stage as Southern Nevada legislators tried to block a proposal to have state employees in their region subsidize the pricier health insurance premiums of their Northern Nevada counterparts.

The Public Employees Benefits Program budget on Monday passed a Senate and Assembly money committee in spite of southern objections, with a vote along geographical lines.

"It's not the fault of the state employees that we're in a place where we can't get a better deal," said Assembly Speaker Pro Tempore Debbie Smith, D-Sparks.

A plan to make health maintenance organization insurance premium rates uniform across the state was one of several proposed changes in benefits for state employees. The Legislature's vote comes after the nine-member PEBP board OK'd a plan to reduce spending by more than $85 million in the next two years.

Changes include eliminating vision coverage beyond a basic eye exam, setting a lower ceiling on dental coverage, reducing life insurance payouts and shifting employees to high-deductible insurance plans that closer reflect the market cost of medical services.

PEBP has struggled to rein in prescription drug and medical costs for current and retired state employees, and the high-deductible plan would have participants pay more out-of-pocket before insurance kicks in.

High-deductible plans are meant "to encourage participants to think more critically about the need for medical treatment or certain types of prescription drugs," according to a staff memo on the budget changes.

But groups representing PEBP participants decried the plan to scrap a co-pay and have members pay "retail value" for medical services, up to a point.

"It's a very excessive cost," said Vishnu Subramaniam of the local chapter of the American Federation of State, County and Municipal Employees. "It's almost like not having insurance."

Of all the insurance controversies, the north-south subsidies were most heated.

Public employee HMO members in northern, rural areas pay more than Southern Nevada residents because medical providers are fewer and farther between, meaning less competition between health care providers and higher prices.

HMO premiums were the only item in the PEBP budget that still differed between the geographic regions, and the PEBP board wanted to change that, PEBP Executive Officer Jim Wells said.

Some lawmakers said it was the wrong time for the switch, as state employees face pay cuts and fewer perks.

Assemblywoman Maggie Carlton, D-Las Vegas, suggested easing in the premium increases over several years.

The PEBP budget passed without Carlton's proposal.