CHARLESTON, W.Va. — An offshoot of the Public Employees Insurance Agency Task Force is starting to consider how to balance revenue and expenses as healthcare costs rise each year.
The revenue and cost subcommittee took an initial dive into the complex balancing act of insurance for West Virginia state employees.
“Our task is to come up with options for developing revenue and identifying costs. It’s a chicken/egg,” said Joe Letnaunchyn, who led Tuesday afternoon’s meeting. Letnaunchyn is president and chief executive officer of the West Virginia Hospital Association.
Another group, a committee tasked with shaping coverage and plans, has overlap with this one. Whatever that committee recommends to be covered, this committee will have to recommend how to pay.
“Once we get that model, I believe our responsibility is to come up with the revenue design to support it — but also look at reducing costs that you could do regardless of what the plan looks like,” Letnaunchyn said.
As examples, he gave trying to trim back on redundant testing. Or promoting telehealth in instances where it would be OK to not see a doctor in person.
“So what I’m trying to focus on is coming up with changes to the plan that don’t hurt the participant, that save the state and the plan money and also is sensitive to the needs of the taxpayers,” Letnaunchyn commented after the meeting.
Committee members who gathered at the state Capitol on Tuesday afternoon talked about a variety of issues.
Letnaunchyn reiterated to the group that PEIA experiences a 5 or 6 percent cost increase each year. So the task force will have to focus not only on current costs but also steadily rising costs.
Delegate Mick Bates, D-Raleigh, put it in dollar terms — a $50 million increase, and possibly more.
“I don’t feel confident that we’re going to find $50 million in cost reductions in the plan, as it exists today, without a reduction in benefit or an increase in premium,” Bates said.
Committee members noted that potential revenue sources such as increased severance tax on natural gas, legalization of marijuana or a new tax on soft drinks had been brought up at some public hearings around the state.
Representatives of natural gas companies, having heard about severance tax as a possible topic, attended the meeting.
The committee agreed to ask state analysts to produce information about those potential revenue sources. But there was also discussion about what might have a chance of passing in the Republican-led Legislature.
“Marijuana, severance tax and beverage tax, I don’t see those as things that will just slide through the Legislature,” Letnaunchyn said.
Committee member Douglas Kirk, who works with Division of Highways, reminded the committee to focus on costs too.
“We’re gonna have to do something drastic, I think, to change how people view their health and healthcare. It’s gonna take a culture change,” Kirk said. “It has to be a change in the way people take care of themselves.”
Senate Finance Chairman Craig Blair suggested the task force might also have to take a hard look at some coverage areas.
For example, Blair said the group should look at coverage of spouses, providing an example of one who is a state employee with PEIA and another of whom is a high wage earner but who takes the state benefit.
Greg Burton, who runs BrickStreet Insurance, said that company had to take a hard look at benefits for spouses. Burton described such decisions as a it’s a legitimate policy choice that may need to be considered.
“At some point, we’re going to have to figure out how to pay for what’s recommended,” Letnaunchyn said.
The first meeting of the coverage and plan subcommittee is 2 p.m. May 23 at the state Capitol.
There are also ongoing public hearings at locations around the state. Schedules for meetings — plus videos — are at the Task Force web site, peiataskforce.wv.gov.