CARSON CITY, Nev. (AP) - More than 41,000 government workers and
retirees covered by Nevada's health insurance plan face reduced benefits and higher premiums starting in July 2009 as a result of nearly $58 million in Public Employees Benefits Program budget cuts.

Leslie Johnstone, the program's executive director, will outline options at a September meeting of the board overseeing the program. She said Gov. Jim Gibbons has made it clear the program will get no more for retirees in the two-year budget cycle that starts in July 2009 than it did in the current budget period.

"There will be direct financial impacts on participants," Johnstone said Thursday, noting that medical claims are expected to increase about 9 percent each year and inflation is expected to raise costs 10 percent a year.

The budget cut would have been higher but the board deferred a plan to expand benefits to cover domestic partners, including same-sex couples. The move, which saves $8.6 million, was made after Gibbons said he'd cut the funds from the budget anyway because of the state's economic problems.

Gibbons has ordered all state agencies to produce plans for 14 percent cuts in their budgets for the coming two years.

The health insurance program provides benefits to state employees, non-state workers employed by local governments and retirees. State support for the coming biennium will be capped at $509.8 million under the governor's orders.

When state worker, retiree and non-state worker premiums are added in, the program's total proposed budget will be just under $1 billion for the biennium.

The state currently contributes $626 a month for each state employee and $410 per month for each retired state employees. There also is a subsidy to help cover part of the cost of dependents.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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