The golden days of PEIA — when a generous state benefit helped offset lower-than-market wages — are behind us. That era isn’t coming back, at least not based on today’s economic realities. That’s regrettable. Still, it’s time to stop longing for what was and start facing what is.
The numbers illustrate the challenge.
According to an October 2024 report from the Kaiser Family Foundation outlining private employer figures:
- Average premiums for single coverage rose 25% in just five years.
- Family premiums in 2024 average $25,572 — up 24% since 2019 and 52% since 2014.
Every data source tells the same story: healthcare costs are skyrocketing. And the state can’t change the price of a commodity it doesn’t control. Healthcare is set by the market, not by Charleston.
West Virginia doesn’t generate revenue. It relies on taxes from citizens and federal funding, much of which is restricted. So, the state’s ability to spend is constrained by what taxpayers can reasonably support.
According to USAFacts, an aggregator of government data, West Virginia ranks 48th in average weekly wage. When adjusted for regional cost of living, we move up only slightly to 45th. Despite low costs, we remain a relatively poor state. And don’t forget, healthcare is priced nationally. Add in one of the nation’s lowest labor participation rates and some of the country’s worst public health stats – driving risk and overall program cost higher even though PEIA sets individual pricing according to salary, not risk – and you’ve got a perfect storm.
Governor Morrisey and legislative leaders have floated a special session on PEIA. But unless everyone acknowledges that the past is gone, the session will be a waste of time.
Change is not optional. It’s required.
The Bureau of Labor Statistics says 51 percent of private sector workers were in high deductible health plans in 2023. PEIA? Far fewer. A few hundred out of hundreds of thousands of members – nothing comparable to more than 50 percent. High deductible plans offer lower premiums, tax-advantaged savings options, and reduce overall costs. Relatively healthy or younger enrollees must be incentivized to leverage such plans. It’s in their best interests and that of the overall program. Why hasn’t PEIA’s enrollment followed the trend?
There’s also the question of who PEIA is meant to serve. It began as a benefit for state employees and teachers, but it’s ballooned into a catch-all.
State Treasurer Larry Pack recently said, “We said ‘Come on in’ to cities and counties… now we’ve got 200,000 people in the plan, but only 30,000 to 50,000 are actually state employees.”
The numbers don’t work. A responsible, phased plan is needed to move non-state entities off the rolls. Again, Toby and Edith can’t cover the cost.
Even with changes, PEIA is still a good deal. Ask any private-sector worker. Granted, that doesn’t lessen the sting of recent double-digit rate hikes. If savings can be found by tightening eligibility or shifting plan structures, those funds should go back to employees in the form of targeted pay raises. Healthcare inflation is outpacing everything else. Salary is one lever the state can still manage within its means to a degree.
The bottom line? Minus wholesale PEIA change, West Virginia will continue trying to run a race it has zero chance of winning. It’s time to stop chasing the past and start building a sustainable future as best the means we have now allow.
Editor’s Note: Meadows’ spouse is a PEIA finance board member. Meadows’ comments are his own and do not reflect those of any other individual or organization.