Task force seeks long-term solution for W.Va. employees
By Steven Allen Adams
Special to the Times
CHARLESTON — Monday’s meeting could be among the last for a task force studying improvements to West Virginia’s health insurance program for public employees and retirees, but a teacher’s union is concerned the state isn’t preparing for the future.
The Public Employees Insurance Agency Task Force will meet 1:30 p.m. Monday in the Governor’s Cabinet and Conference Room at the state Capitol in Charleston. The task force, broken up into three subcommittees, has been looking at long-term solutions for PEIA since March.
Among proposals is making it easier for state employees who live in border counties to receive health care outside West Virginia. Plan A benefits would move to an 80/20 co-insurance. Plan B participants would return to 70/30, and the state would remove the maximum facility fee limits for out-of-state facilities and remove a $25 copay for out-of-state services
Additionally, an appeal process would be created for people requiring a third-tier non-preferred drug, and the state would look at a new wellness program for state employees. Gov. Jim Justice came up with the recommendations with the help of the Policy and Coverage Subcommittee based on public hearings and surveys of public employees conducted over the summer.
“In West Virginia we’re eat up with border counties,” Justice said during a Dec. 5 press conference. “Everyone possibly has a doctor right across over there and wants to go over there, but it’s been prohibited for them to go over there. It’s my recommendation to lift that.”
PEIA officials said the recommendations would cost $9.8 million, causing PEIA to operate at a $47 million loss in fiscal year 2020, which starts in July 2019. By fiscal year 2021, the state would need an additional $95 million for the state’s match, with employees and retirees paying $23 million for the 80/20 match.
In October, Justice announced his intentions to put $100 million in PEIA for long-term stabilization. Combined with budget surpluses, PEIA officials say the program could survive at least two years without increasing premiums for plan members. Yet, concerns remain that lawmakers and the governor are kicking the can down the road.
SAVING THE PATIENT
Justice, who took office in January 2017, came into Charleston in the middle of one of the worst revenue shortfalls in state history, largely fueled by substantial decreases in coal severance tax revenue. One of the programs hit the hardest was PEIA.
“PEIA, for X amount of years, has become not just unstable, but very unstable,” Justice said. “There’s been a lot of people who have worked in government that took a job thinking that they maybe weren’t paid the highest, but took a job thinking they’ve got great benefits, and those benefits were really really important. All of a sudden, their benefits started eroding.”
In the early part the decade, the PEIA Finance Board started spending down its reserve funding. In 2013 that fund had just barely $200 million. By 2016, the finance board was proposing $120 million in benefits cuts. By 2018, thousands of teachers and other public employees were striking for better pay and PEIA stability.
The strike accomplished several things, including getting teachers, school service personnel, and other state workers a 5 percent pay raise. It also got them a freeze on any health insurance premium increases for fiscal year 2019, which started in July. Lastly, the strike resulted in Justice creating the PEIA Task Force in March.
“When I got here, everyone thought there was going to be no recourse but to go to a 70/30 plan,” Justice said. “If you’re making $40,000 a year and your insurance premiums go up and up and up, it’s tough stuff.”
The task force was commissioned to review and study how PEIA works, how premiums are calculated, what it covers, prescription costs, and what efficiencies could be found to lower costs and keep premiums affordable.
Since then, the task force and its three subcommittees have held 36 meetings, even though there was a nearly two-month hiatus starting after Aug. 24 and one meeting per month starting Oct. 29. The Cost and Revenue Subcommittee hasn’t met since August.
Cost and revenue might not be much of a problem for PEIA in the short-term however. Officials announced earlier this summer that PEIA saw a $32 million surplus as fiscal year 2018 that ended in June. Officials are also expecting a $70 million surplus at the end of fiscal year 2019.
“You had an unstable situation in PEIA,” justice said. “Today, you don’t have a final solution, but you have a stable situation in PEIA today. We have got to where we are on solid ground for X number of years with our commitment that we just recently made to put a $100 million aside in PEIA.”
That’s all good news. The bad news is these same officials have said they expect PEIA costs to increase by $50 million every year for the foreseeable future. Dale Lee, president of the West Virginia Education Association and a member of the task force, said that $100 million in one-time money is short-sighted.
“I’m appreciative of the governor’s $100 million, but our task was to look at the long-term solutions for PEIA, and $100 million is not a long-term solution,” Lee said.