CHARLESTON, W.Va. — State Public Employees Insurance Agency Director Ted Cheatham will propose two changes to next fiscal year’s health insurance plan for state workers when the PEIA Finance Board meets Thursday.
The changes to the proposed plan have to do with premiums and drug costs, Cheatham told MetroNews Wednesday.
“We’ve recommended a premium increase for pre-65 retirees instead of increasing their out-of-pocket max a lot more. We’re looking at maybe changing to a mandatory 90-day fill on prescription drugs as opposed to changing the second-tier co-pay to 30 percent,” Cheatham said.
PEIA needs to come up cuts totaling $55 million. The proposed plan focuses on at least $25 million from active employees and $15 million from retirees. Premium increases are not part of the options.
The options were part of public hearings attended by state workers earlier this month. The board and PEIA staff heard some good suggestions, Cheatham said.
“We do listen. A lot of people think we do not but we do listen,” Cheatham said. “A lot of times our hands are tied.”
The $55 million problem is being driven by the escalating costs of prescription drugs.
“Pharmaceutical costs are trending double digit (increase). Medical trends are also in a six to seven percent range increase,” Cheatham said. “Costs are going up in the medical environment.”
State law requires the finance board to approve the health insurance plan by the end of December but that doesn’t stop the legislature or the new governor from proposing more money for PEIA. Cheatham said Wednesday he hasn’t heard anything from legislative leaders or those who are part of the transition team for Governor-elect Jim Justice.
None of the benefit cuts proposed last year actually went into effect after the legislature added funding to the program in the new state budget including a $43.5 million increase for employer premiums. State workers are paying a 12 percent premium increase in this year’s plan.
The legislature also approved a bill to add $15 million a year for five years to help reduce premium increases for retirees and to rebuild the agency’s reserve fund.
At some point PEIA needs to come up with a long term plan where there is give and take, Cheatham said.
“Where the employees have to give a little bit and the employer (the state) has to give a little bit every year. We need a plan to figure out how we keep this plan stable over the long haul,” he said.
The finance board meeting is scheduled for 1 p.m. Thursday at state DEP headquarters in Kanawha City.