The Public Employees Insurance Agency is doing all right.
The agency’s financial trends have been stable, officials said during a regular update. The big concern is a factor too big for PEIA to control on its own: the universal trouble of increasing costs for medical care and prescription drugs.
“The good news is that the plan fared better than expected during the fiscal year that ended on June 30,” agency director Brent Wolfingbarger told members of the PEIA Finance Board.
“The bad news, however, is that economists are continuing to predict that medical and prescription expenses will increase steadily and substantially during fiscal year, 2027 and future out years.”
Gov. Patrick 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.
“The can’s been kicked down the road for so long, and I want to make sure that we’re living within our means financially,” Morrisey said on “Panhandle Live” on WEPM Radio.
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.
Yet lawmakers have questioned whether a special session is really necessary right away. “I think we have to start with the question of what’s broken, and is anything broken,” House Speaker Roger Hanshaw said last week on MetroNews Talkline, citing the challenging issue of medical inflation.
The most recent update from the Public Employees Insurance Agency isn’t likely to add to the urgency for a special session.
Wolfingbarger agreed that increasing healthcare costs are likely to be the biggest trouble, across the country and at home.
“Because West Virginia’s population generally tends to be unhealthier than the country as a whole. PEIA’s health care expenses are protected to increase at an even higher rate,” he said.
“Medical costs are rising much faster than the nation’s ability to pay, and those same headwinds will continue to impact West Virginia its taxpayers, PEIA and its members for the foreseeable future.”
The most recent update showed the plan outperformed expectations at the conclusion of the fiscal year, with total assets of $358 million and total liabilities of $149 million for a net position of $209.8 million.
The PEIA Finance Board’s next meeting is set for Oct. 23.
That meeting is usually when PEIA officials will recommend a plan for the coming year, including any potential changes to benefits or costs for people on the insurance. A set of public hearings at locations around the state typically follows that rollout.
Over the past couple of years, people covered by PEIA have faced sharp cost increases, which has led to an ongoing public dialogue over whether changes need to be made to the program.
Governor Morrisey has a four-point proposal for changes to the Public Employees Insurance agency and a bill to reflect that.
But some 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.
The proposals are:
— Remove coverage eligibility for spouses who are offered health insurance through their own employer.
— 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 establishment of a PEIA fraud unit.
— Greater leverage over pharmacy benefit managers and negotiating, especially with specialty drugs like GLP1s such as Ozempic.
Representatives of unions that represent public employees spoke during Thursday afternoon’s PEIA Finance Board meeting and reiterated that they would like to have opportunities to address any big changes to the program.
“I would just reiterate, again: What can we do together as we work with the administration and legislators to come up with something that’s a good compromise for everyone?” said Elaine Harris, representative for the Communication Workers of America.
Dale Lee, co-president of the newly launched Education West Virginia teachers union, asked several questions about what the Morrisey administration might be considering for PEIA and how any changes might work, especially regarding coverage for spouses.
“My concern is we’ve had a lot of time to study this,” Lee told the PEIA board. “We’ve had a lot of time to come to the table, but we want to make sure that everybody’s at the table with the correct data and with all the information that we can possibly get.”