CHARLESTON, W.Va. — PEIA Director Ted Cheatham says the finances for the insurance agency are healthy right now, although that won’t stop the work of the PEIA Task Force.
“We’ve had a very good year,” Cheatham said at the beginning of a meeting Friday for a group of task force members who are considering what the shape of PEIA should be.
PEIA ran a surplus of about $31 million for the recently-completed fiscal year. For fiscal year 2019, the plan is now estimated to run a surplus of about $70 million.
PEIA has been running a surplus and has been building its reserves to the point that it could go two years without a boost of additional state revenue, Cheatham told task force members.
“We firmly believe we can cover 2019 and 2020 without any additional revenue from the state,” Cheatham said.
But after that, he said, PEIA would likely need a financial influx, likely around $100 million.
West Virginia Education Association President Dale Lee warned against spending down savings to cover the costs of PEIA in the short term.
“That’s not the answer either,” Lee said after the meeting.
“To me that’s one of the reasons we got where we are, is early in this decade we were spending down reserves rather than putting additional money into the reserves so when we had really bad years we’d have some excess money available. So it’s not the answer, to me — spending down the reserves all the way.”
Instead, Lee has advocated for finding additional revenue to shore up PEIA long term.
“We have to look at this as a funding source. We have to have some long-range funding plans, and even when we have a good year continue to put some additional money in to take care of the lean years.”
Surveys of 1,078 participants showed that half believe a tax would better fund PEIA, with about 45 percent of respondents proposing to target natural gas and another 11 percent suggesting the legalization and taxation of marijuana.
Over the course of the task force’s work, officials have operated with a premise that rising healthcare costs will mean needing an additional $50 million year upon year for PEIA.
That number is achieved by rounding PEIA off to a billion-dollar annual program with estimated 5 percent annual cost increases.
But Cheatham also told the committee that he expects $20 million annual savings through a recently-signed contract for Medicare Advantage.
“Twenty million is nothing to scoff at,” Cheatham said.
The group that met Friday is the coverage and plan subcommittee, responsible for recommending what PEIA should cover.
The subcommittee discussed several specific issues on Friday afternoon, including the common topic of greater flexibility for those who want to seek care across West Virginia’s border.
Some of those may be people who actually live across state lines but who live in West Virginia.
“It’s a huge inconvenience,” said task force member Amy Loring, human resources director for Berkeley County schools. Loring said she would like to see recommendations to address the issue.
Cheatham responded with an estimate that doing so would cost about $10 million more.
Loring, after the meeting, said that increases her resolve to push for changes.
“I thought it would have been a higher cost given how much of a concern it was,” Loring said. “It pushes me to feel stronger about that recommendation and hope it would be something that comes out of this committee.”
And the committee talked about how to get those who are covered to embrace greater health habits.
The same survey that showed support for increased taxes to fund PEIA also showed slim support for healthy lifestyle programs meant to improve wellness and decrease insurance costs.
In a question about participation in health programs, 17.1 percent (185 people) said there are none they would like to take part in. Another 13.3 percent (144) said the question does not apply to them.
A program called Go 365 was dropped because PEIA members widely perceived it to be punishment.
Rob Alsop, a West Virginia University vice president who serves as chairman of the subcommittee made reference to that experience, saying “they like the carrot better than the stick. We’ve already seen the stick is not very popular right now.”
Christian said West Virginia’s health trends on obesity and diabetes are alarming, “and it’s only going to get worse.”
“What we’re really talking about here is population health management,” he said.
“I would ask the committee to recognize the soft costs or hidden costs that we’re not looking at that we need to be prepared for.”
Committee members said they still need some guidance about Gov. Jim Justice’s vision for the scope of PEIA’s coverage.
“The easiest thing to do is add coverages and turn it over to the cost committee and say ‘Here it is.’ But is that realistic?” said Marty Becker of QBE Insurance Group.
Geoff Christian of Commercial Insurance Services, echoed that sentiment.
“Guidance would be very helpful,” Christian said. “It would help us kind of laser in a little bit more on what we need to do.”
Mike Hall, chief of staff for the governor, said he would feel that out.
“I can take that back to the governor and discuss that with him and others to get some sort of guidance on that,” Hall said.
Hall said one of the roles of the committee is to say “Here are the options, and this is what it costs.”
WATCH LIVE: Coverage & Plan Subcommittee Meeting https://t.co/Tt20ZMtnpS
— West Virginia PEIA Task Force (@WVPEIATaskForce) August 24, 2018