Gov. Patrick Morrisey has a four-point proposal for changes to the Public Employees Insurance agency and a bill to reflect that — but not clear support from lawmakers, according to four sources familiar with discussions.
“We’re not going to move too soon,” one lawmaker said. “We were skeptical and have to see more.”
The governor has had several meetings and released a bill but doesn’t want it shared beyond legislators who have seen it, according to the sources. The direct talks have been limited to a small group, but other lawmakers have been briefed on the recommendations.
“Still a little early, maybe some things are fluid,” another lawmaker said.
Yet another lawmaker more pointedly said, “It’s headed for disaster.”
Morrisey has regularly talked about the likelihood of a special session that could include changes to PEIA, which is anticipated to experience cost growth of about $50 million a year over the next few years.
State officials regularly set special session dates to align with already-scheduled interim meetings because lawmakers would already be at the Capitol anyway. The next round of interims is Sept. 7-9 in Charleston.
The governor has four main points to his PEIA package, and lawmakers are skeptical for two reasons: 1) A couple of the changes conceivably could be accomplished administratively — strictly by executive branch action and 2) The remaining proposals could result in a public backlash and do not have clear legislative support.
“He’s doing it now to give a little time for damage control,” a legislator said.
The proposals are:
— Remove coverage eligibility for spouses who are offered health insurance through their own employer.
Spouses with access to another system now pay a premium to remain in the Public Employees Insurance Agency. The proposed change would eliminate that option.
This change is being described as a $21 million savings for the state.
Three years ago, lawmakers passed a bill mandating a monthly surcharge if a spouse has access to health coverage through their own employer but chooses to enroll in PEIA instead.
Right now, for families who opt in, employees must sign an affidavit during open enrollment to attest to their spouse’s access to other employer-sponsored medical coverage.
— The state would establish a new plan for new employees.
PEIA has had an 80-20 cost split, meaning that the employer (the government) pays 80 percent and the employee pays 20.
For new hires, this ratio would shift to a 75-25 split.
The legislative concern is how this would affect state agencies’ ability to attract qualified new hires if pay is flat and insurance is moved to a lesser value.
— The establishment of a PEIA fraud unit.
PEIA currently has a mechanism to report in “if you suspect a doctor, insurance company or individual is committing insurance fraud.”
A 2021 report by the legislative auditor recommended improvements to PEIA’s third-party risk management and internal controls over contracted third-party benefits management services.
The report concluded that “PEIA’s internal controls for third-party risk management could be improved to detect and respond to potential fraud more quickly.”
— Greater leverage over pharmacy benefit managers and negotiating, especially with specialty drugs like GLP1s such as Ozempic.
PEIA’s costs have gone up as more people in West Virginia’s significant diabetic population use those drugs. The GLP1s are also popular for weight loss, but PEIA does not provide coverage for that use.
During the most recent PEIA Finance Board meeting in June, officials described the agency’s finances as stable.
Even at the time, though, people insured through PEIA were bracing for significant premium increases because of decisions made by the agency during the prior fiscal year.
There are about 230,000 participants in the insurance program for public employees.
During that PEIA Finance Board meeting earlier this summer, West Virginia Education Association President Dale Lee asked about the discussions that were leading up to a potential special session.
“Do you have any idea if this roundtable discussion is going to include people that are affected? Are we going to have a seat at the table?” Lee asked.
Administration Secretary Eric Householder, who was chairing the meeting, responded that it was too early at that point — but he anticipated public involvement.
“I suspect you’ll see something. You’re going to have to have buy in from all parties,” Householder said. “But I don’t think we’re at that point yet.”