With some relatively small changes, the finance board for the Public Employees Insurance Agency approved significant cost increases for workers and retirees.
Board members agreed to remove a proposal that would have collapsed salary tiers in the wage-based insurance plan from 10 to five, so that will no longer happen.
The proposal also had originally included a lower financial assistance package to help some retirees cover the cost of their insurance. The board on Thursday agreed to keep the current assistance rates intact. The premium increases that retirees have been in line for would still go into effect.
On the whole, though, cost increases that have been discussed over the past few months are now in motion for the coming fiscal year. Organizations representing public employees and retirees are likely to now take their concerns to elected officials like the incoming governor and new legislators.
West Virginia Education Association President Dale Lee told PEIA officials Thursday that he appreciated the opportunity to speak out at public hearings around the state last month — and he hopes the possibility of legislative changes could soften the blow for workers and require another round of public hearings next spring.
“I’m hoping we can do this again in May,” Lee said.
PEIA proposed the cost increases to make up an estimated $113 million gap for the coming fiscal year because medical and drug expenses have outpaced the money available.
Public employees in the state’s plan could face premium increases next year of 14% for the state fund or 16% in plans for local governments. Retirees would face a 12% premium increase.
The agency is proposing increases in deductibles of 40% — on average more than $300. Additional proposed cost increases for people with the insurance, including a bump in the surcharge for spouses to $350 from the current $147, are meant to help PEIA make up its projected financial gap. The other cost increases include higher copays for inpatient services, outpatient, therapy, pharmaceuticals and emergency room treatment.
The cost pressures for insurance have occurred after legislation passed to mandate that the insurance plans snap back to an 80-20 cost split between the government employer and insured employees. Those 2023 changes to PEIA also responded to complaints that healthcare providers were having trouble making ends meet because of the state insurance’s traditionally low reimbursement rate. Lawmakers passed a bill making reimbursement rates for medical providers up to 110 percent of the federal Medicare rate.
Lee of the WVEA said he hopes the Legislature might consider some relief.
“The finance board made the changes they could, but they couldn’t make any substantial financial changes to the plan. So it’s going to take legislative action to put additional dollars into the plan,” Lee said in a telephone conversation after the meeting.
“So I’m hoping they will see the necessity of some additional funding and some changes in the language of the hard, fast 80-20 to ‘the state shall pay a minimum of 80 percent and the employee shall pay a maximum of 20 percent,’ which is no more than/no less than language that I’m talking about.”
West Virginia’s political leaders are in flux, with a new governor set to take office early next year and the Senate ready to change presidents. While acknowledging some political uncertainty, Lee said he has hope for some relief.
“I’m always optimistic. I give everyone the benefit of the doubt, and I believe they were elected to do what’s best for the citizens of West Virginia, and a large number of our citizenship are on our public employees insurance plan — so I believe they will take a long, hard look at things they can do to take this cumbersome burden off the public employees.”
Kristie Skidmore, president of American Federation of Teachers-West Virginia, said the PEIA Finance Board had few options — and underscored that public debate will now flow to state lawmakers.
“The Finance Board approved their proposed plan today, and while there were a few positive changes, overall, it’s still a plan that is financially devastating for many education and public employees,” Skidmore stated.
“In fairness, the Finance Board didn’t have many options today to make the proposed plan better; the solution to this issue lies solely in the hands of our legislature, which coincidentally is meeting for interims beginning this Sunday. That’s why we have asked all education and public employees to call legislators during the December 8-10 interim session and ask them to make stabilizing PEIA and providing affordable healthcare a priority.”
West Virginia public educators went on a statewide strike in 2018 over concerns that their pay rates did not adequately compensate for the rising cost of insurance. Gov. Jim Justice’s administration dealt with the conflict with a series of pay raises.
The administration also pumped millions of dollars into a PEIA Rainy Day Fund that was meant to hold down cost increases. The fund did suppress cost increases to workers for a few years, but the practice has ended.
“We’ve been able to fund through surpluses or pay raises or whatever it may be, but we do need a long-term fix,” Justice said this week during an administration briefing in response to a question by Caelan Bailey, a state government reporter for West Virginia Public Broadcasting.
“But getting the Legislature to agree to a long-term fix is hard. It’s just a really, really hard issue to do. Now we’ve tried. We’ve tried lots of different things.”
Justice is in the final weeks of his second term and next year will be sworn in as a U.S. Senator, so the Legislature and Gov-elect Patrick Morrisey will soon have say-so over any policy response to the increased cost of insurance for public employees.
“I would say for the governor to be, healthcare costs are still going to go up,” Justice said. “The Legislature came up and changed the rules of the game and we went to an 80/20 plan and with all that now we’ve got a situation where folks are having to pay a little more. We’ve covered it with pay raises, and we’ve covered it different ways like that,” Justice said.
“But going forward, if you’re asking Governor Justice who is leaving you as your governor and everything, going forward I’d continue to work on a long-term fix, but it’s not an easy thing.”
https://embed.documentcloud.org/documents/25446700-december-5-2024-main-finance-board-presentation/?embed=1