CHARLESTON, W.Va. — The director of the health insurance program for state workers told state lawmakers Thursday the agency’s strategy is to gradually spend time the reserve fund to keep premium increases at a minimum.
PEIA Director Brent Wolfingbarger said a consultant recommended using the reserve fund gradually, instead all at once, is the better strategy.
“They looked at the problems that had occurred during a period of four years where there were no increases at all and then we had to spike to a 14 percent, 10 percent increase, because we hadn’t properly prepared a solid financial foundation to weather those storms,” Wolfingbarger told the House Finance Committee
The PEIA Finance Board voted last December to increase premiums that state workers pay for health insurance by three percent beginning July 1.
Cabell County Delegate Sean Hornbuckle, the House Minority leader, asked Wolfingbarger if the entire increase in cost could have been taken care of by reserve funds that would have meant no premium increase for workers.
“We could have, but then we would have run counter to the recommendations in the (consultant’s) report and found ourselves three or four years down the road scrambling to find money and having to have double-digit increases in premiums,” Wolfingbarger said.
He said health care costs continue to go up especially in the area of prescription drugs. He said the reserve fund, which is more than $100 million, will be needed in years to come.
“We’re trying to be frugal so that we can slowly bleed off that reserve to keep premiums down for both retirees and actives,” he said.
PEIA took its plan out for several public hearings last November. Wolfingbarger said state workers spoke out.
“Naturally they weren’t happy about any increase at all but they appreciated the fact that we were actively trying to prevent having those double-digit increases in the future,” he said. “They understod and generally supported that modest increase.”
PEIA premiums and deductibles went up by 14 percent during the past year.