Retirees joined by several lawmakers objected Friday to a plan that moves them off the state benefit plan and into a Medicare Exchange plan managed by a private company.
Marty Bibb of the Retired Public Employees of Nevada told lawmakers reviewing the benefits program budget cuts have taken more than $100 million from the Public Employee Benefits Program in the past two years. He said the deductible has risen from $50 to some $1,900 under the proposed budget and now the plan wants Medicare eligible retirees moved out.
"The 9,000 Medicare retirees will no longer have insurance provided by this plan but the private sector," he said. "This will be a dramatic change for Medicare retirees to deal with out of state agents."
Jim Richardson, representing the university system's Faculty Alliance, said because of the budget crisis, the subsidy for retirees has basically been flat for four years, "despite medical inflation of about 10 percent a year."
"The plan is deteriorated," he said. "For those who complain government needs reform, it has been reformed, drastically reformed."
But he said the PEBP plan putting Medicare eligible retirees in a Medicare Exchange is better than what Gov. Jim Gibbons and the SAGE Commission wanted to do - "dump them."
"Moving Medicare retirees to the private market is the better choice," he said.
Judy Sheldrew, who was state budget director before retiring, questioned whether the move violates the state constitution's mandate barring "impairment of contracts."
"Is it such a significant deviation from the contract that was made with the retirees that it's an impairment of contract?" she asked calling on lawmakers to ask their legal division to research that issue.
Several other retirees said outside the meeting that the state was reneging on a promise made to long-time employees that they would be taken care of in retirement.
PEBP Director Jim Wells said the agreement with Extend Health of Salt Lake will provide retirees with access to "multiple plans in every county." He said they can't be denied for pre-existing conditions and will be able to get coverage at a set rate despite their health. He said 4,231 have signed up for appointments to review available plans, which will become available effective April 1.
As an example, he said a retiree now out of pocket $101 a month for coverage would see that bill increase to $125 a month for a plan "as good or better" than their existing state coverage.
"It pay's for everything Medicare doesn't pay for," he said. "Under the plan, many of our retirees will actually be better off."
PEBP's recommended budget for the coming two-year budget cycle is $969.4 million. It is designed to maintain total state costs despite inflation pressure.
To do so, the plan doubles the out-of-pocket deductible from $800 to $1,900 for an individual and $3,800 for a family, reduces payment after the deductible from 80 percent to 75 percent and raises the family out of pocket maximum from $7,400 a year to $7,800.
It creates health savings accounts funded by employees and health reimbursement arrangements funded by the state.
It reduces coverage for a variety of medical needs including eye glasses and dental work as well as cutting back long-term disability pay from 60 to 40 percent. Employees would have to work 30 hours a week instead of half time to get the full subsidy from the state.
Spouses with health plans would no longer be covered by the state plan and Medicare eligible retirees would be moved to the exchange program.
Subcommittee Chairman Marcus Conklin, D-Las Vegas, said all the plan changes over the past few years "have come at the cost not to the state but to the beneficiaries of the plan."
"When is that going to stop?" he asked.
Wells said the core of the problem isn't with the state but the medical inflation rate.
"This is an out of control problem because we can't control medical inflation," he said.
Assemblyman Randy Kirner, R-Reno, a former member of the PEBP board, joined Conklin in his criticism.
No action was taken on the plan.