Benefits expanded for state workers

With all of state government slashing spending to address expected budget deficits, the one state program that is exempt from the cutbacks is angling to spend even more taxpayer money.

On Thursday, the panel that oversees the Public Employees' Benefits Program -- the health insurance plan for state employees, state retirees and their families -- recommended that benefits be extended to workers' domestic partners and their children. The PEBP board also voted to request that taxpayers pick up the bulk of the new premium costs, estimated at about $3 million per year.

The Legislature would have to authorize the new funding, meaning the soonest the policy could take effect is July 2009.

Domestic partner health benefits are a political hot potato because they don't distinguish between heterosexual and same-sex couples. Opponents of gay marriage -- which was banned in Nevada by a voter-approved constitutional amendment -- view the extension of health insurance to gay workers' partners as formal recognition of a union and an end-run around the wishes of the electorate.

But as far as we're concerned, the sexual orientation of those who might benefit from this policy is neither here nor there.

Taxpayers should be more concerned about the cost. It would be grossly unfair for private-sector employers and workers, grappling with big increases in their own health insurance coverage amid a sputtering economy, to bear nearly the entire expense of expanding the PEBP risk pool.

State workers get a sweet deal on health care. If the employee chooses a high-deductible plan, taxpayers cover the entire monthly premium of about $480. Adding a spouse costs the worker only $80 per month, with taxpayers picking up the other $453. Adding children doesn't cost the state worker much more. For the low-deductible plan, the state worker's monthly share of the $552 premium is $28. Coverage for the worker and a spouse costs the worker $182 per month, but costs taxpayers $990 per month.

Few companies can afford to so heavily subsidize the health insurance of their workers and families. If they do, workers bear a hidden cost through lower wages. And if a company decides to beef up its benefits by extending them to domestic partners and their children, executives certainly don't call on other businesses to pay the bill. A good share of the cost of offering medical coverage to all worker households -- including nontraditional ones -- is spread among plan participants.

It is simply inconceivable that state bureaucrats would see fit to hand government workers -- already the highest-paid sector of the state work force and guaranteed a secure early retirement by a lavish, defined-benefit pension -- a costly new benefit that goes above and beyond what was promised to them when they were hired.

And in case the health plan board and lawmakers have forgotten, the Public Employees' Benefits Program is on the verge of insolvency. Already destabilized by rising health care costs and the fact that plan participants pay next to nothing for coverage, PEBP has promised $4 billion worth of health benefits to current and future retirees that it currently has no way of paying. The massive unfunded liability, coupled with $6 billion in unfunded pension benefits, is poised to ruin the state's finances in the decades ahead.

Lawmakers have to address the long-term sustainability of PEBP before they ask taxpayers to expand it -- again. The 2009 Legislature can start by mandating that all future state hires be ineligible for health care subsidies upon their retirement.

If state workers want domestic partners covered under their current health insurance, that's perfectly fine -- as long as they pick up the tab.