Brian Cunningham, who had been executive director of the Public Employees Insurance Agency as it navigated recent financial challenges, resigned during the transition between administrations.
Cunningham’s resignation was effective at the close of Jan. 10, a Friday. A new governor, Patrick Morrisey, was sworn in Jan. 13, a Monday.
“It has been an honor and a pleasure to serve Governor Justice and the public employees of the State of West Virginia. I am most grateful to the teams at PEIA and the Department of Administration for their support,” Cunningham wrote in a Dec. 23 letter to then-Administration Secretary John McHugh.
“Moreover, I am proud of the progress we’ve made together.”
Cunningham was appointed to lead the agency in fall of 2023.
Prior to that, he was executive director of West Virginia PATH, which stands for People’s Access to Help. The program is meant to guide people with low income and limited resources to health programs including Medicaid, the Children’s Health Insurance Program and Medicare Premium Assistance.
He was also a consultant to the WV Medicaid Managed Care program.
The previous director, Ted Cheatham, retired in late 2021.
Jason Haught, PEIA’s chief financial officer, served as interim director between Cheatham and Cunningham — and is doing so again.
The insurance program for about 230,000 public employees continues to be a focus of government.
The PEIA Finance Board approved significant cost increases for workers and retirees for the coming year.
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.
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.
Morrisey, in a news conference during his first week as governor, referenced the increased costs of insurance for public employees as an aspect of an anticipated $400 million state budget deficit for the coming fiscal year.
“As you know, there have been significant budget challenges affecting that program, whether it’s increasing costs of prescription drugs, the change to pay medical providers at 110% of the Medicare rate — and, you know, fiscal year ’26 estimates, based on what we most recently heard, said there would be a proposed 14.7% increase in premiums. That’s in part because of the mandated 80/20 split that’s under state law,” Morrisey said last week.
Senate Finance Committee Chairman Jason Barrett, R-Berkeley, agreed that the health insurance for public employees represents a financial challenge for state officials.
Barrett in a recent telephone interview agreed that rising prescription drug costs will continue to be challenging for PEIA. He also underscored that insurance for state workers is based on their pay, rather than their health risks like other insurance plans.
“Certainly, PEIA is going to be an issue. It’s going to be an issue with rising prescription costs,” Barrett said. “But the fundamental issue that I have with PEIA that premiums are based on an individual’s salary, not risk-based.
“The way a typical health insurance is provided and determined is always based on risk, but PEIA is based on an individual’s salary. So that’s a structural problem that’s going to lead to the insolvency of PEIA if we don’t figure out ways to correct that.”
Barrett concluded, “Drug prices are through the roof, and that combined with that structural problem is why we’re going to have a long-term problem with PEIA if we can’t come together and create a solution.”