The Public Employees Insurance Agency is experiencing some turbulence, with claims up and investments down.
That’s the short story from a PEIA Finance Board meeting on Thursday afternoon.
“It’s not all doom and gloom,” said Chris Borcik, an actuary who presented the most recent financial information to the board. He noted that the numbers he was presenting are preliminary.
But the bottom line is that PEIA is running a $54.8 million deficit partway through the current fiscal year. PEIA officials are suggesting that if the trend continues, then reserves remain strong enough to make up the difference.
A major factor is lower-than-anticipated investment income — $12.8 million down.
“Some investments have rebounded in March, so we’re hoping that trend continues into the future,” Borcik said. “So what you’re seeing in fiscal year 2022, we’re really predicting no investment income at all for this year.”
The other major factor is higher-than-anticipated medical claims, about $18.5 million above what had been expected. Drug claims are also up $15.3 million above what had been anticipated.
“The other part of the double-edged sword is the claims,” Borcik said. “Not surprisingly, we’re seeing this throughout the country.”
Much of the cause of the higher medical and drug costs is associated with the covid-19 pandemic, officials said. More factors driving up costs have been widespread inflation and competition for medical workers.
Looking at projections for fiscal 2023, he said, “you see a similar pattern going on.” The plan may be down $96 million by then, projections show.
At that point, actuaries for PEIA expressed concern over the possibility of dropping below the capacity of reserves.
“Again, this is all preliminary,” Borcik said. “It’s going to be something we have to continue to monitor.”
Last fall, responding to financial outlooks that showed PEIA running a deficit within a few years, Gov. Jim Justice vehemently promised to keep premiums stable.
“I am the one who delivered you no premium increases in PEIA and I’m the one that’s telling you that unless there’s a meteorite to hit the earth your premiums are not going to go up ,” Justice said in October.
