MORGANTOWN – More than 100 people – including teachers, state and local public employees and retirees – turned out Tuesday evening at WVU’s Erickson Alumni Center to make their views known about the proposed PEAI premium hikes and benefit cuts.
It was the fifth of six public hearings the PEIA Finance Board staged around the state, with the final hearing set for Thursday, Nov. 21, in Charleston.
West Virginia Education Association President Dale Lee addressed the board first, and reflected the general consensus.
“I’m angry and I’m frustrated,” he said. But not at the Finance Board, which is obliged to keep the health insurance plan solvent. “My anger is really at the governor and the Legislature.
They have the power to devise a solution, he said. Back in 2018-2019, the PEIA Task Force crafted a bill to solve the many problems, which has never seen a committee. Lee believes that is retaliation for the teacher strikes in 2018 and 2019 that flooded the Capitol halls with red shirts.
PEIA Director Brian Cunningham reviewed the proposed changes to the program. Among them, state employees will see a 14% premium hike; local employees, 16%. Deductibles and out-of-pocket maximum costs will rise 40%. Hospital inpatient copays will go from $100 to $250.
Generic prescription drug copays will double from $10 to $20 and brand name copays will double from $25 to $50. And the spousal surcharge, for employed spouses offered other insurance, will go from $147 to $350.
Among the factors driving PEIA costs up, he said, are mandated increased provider and hospital payments, increased drug costs and the 80/20 mandate that requires premium hikes whenever the state increases funding for PEIA’s share.
Lee pointed out that the 14% state employee premium hike is the third in three years, the previous hikes being 24.5% and 10.5%. “Folks, this has to change, and it’s unacceptable. Our educators, and more importantly, our retirees simply cannot endure this.”
Devan Smith, chief financial officer of the Monongalia County Health Department, described the local effects. It’s already difficult to hire people, he said. “This is another nail in the coffin to staff our organization.”
Premium hikes are becoming unsustainable, he said, and MCHD is passing costs to employees while salaries remain flat. He suggested offering some a la carte benefit offerings to suit employees’ differing needs. And don’t double prescription copays. Increasing copays will decrease compliance, which will increase healthcare costs.
Carol Roskos, American Federation of Teachers-Monongalia County president, said, “I believe the ultimate outcome of this is the privatization of PEIA.” She was among those who referred to years of state budget surpluses. “The money was there to stabilize PEIA and they chose not to do it.”
Employees will be looking at what amounts to a pay cut, and decide, “Hey you know what, it’s cheaper for me to leave the state.”
Mary Ann Ferris, who serves on the WVEA retiree executive board, said, “We were promised our good insurance benefits in lieu of pay raises, and like idiots we agreed to it. … We’ve got to stand up for what we deserve, and we deserve better than what we have. We do not deserve these draconian increases.”
In March, PEIA stopped covering GLP-1 drugs, to treat diabetes and obesity, because of the high costs, amounting to 43.6% of per-member-per-month drug costs.
Lory Osborn, a WVU employee, told a personal story of losing 75 pounds on a GLP-1, which helped her reduce her overall reduced medication usage – creating a savings to PEIA. “Odds are 70% of us will regain our weight, and what effect will that have on our health?” And costs to PEIA.
She understands it’s a business decision, she said, but it will backfire. “It’s awful having a disease, knowing there is a cure and you can’t afford it.”
Lindsay Stepanek, a Mon County teacher. Said, “The proposed plan increases … are going to be debilitating to our state’s public employees. We are already struggling to make ends meet. … Please find some reasonable solutions to fully fund PEIA.”
And Charles Staggs, a Mineral County commissioner, said Mineral competes with neighboring Allegany County, Md., for employees because Allegany can pay more. As an incentive, Mineral County pays PEIA premiums and deductibles. But under the proposal the county will spend another $120,000 on premiums and $100,000 for deductibles. “We’re going to have to rob from other services to continue to pay these premiums.”
WVEA’s Lee offered some suggestions to fix some problems and spare the employees some hardship. One is keep the generic prescription copay at $10, but raise the brand name copay.
Another is to increase administrative service fee – a state pass-through cost to employers. It’s been $50 for decades and the plan proposes to raise it $2.50 per yer for four years.
That will raise only $164,000, he said. The legislature can find money to raise it to $100 without trigger the 80/20 mandate and net $3.4 million.
Use the Task Force proposal, Lee said, to change the 80/20 mandate that triggers automatic premium hikes, to say no less than 80% for the state and no more than 20% for plan members. Tat will give PEIA flexibility to adapt to changing circumstances and consider various options.
And don’t privatize PEIA, he said. PEIA has far lower administrative overhead than private insurers. PEIA has salary tiers that adjust premiums based on ability to pay – and don’t reduce the tiers from 10 to five as the plan proposes, a proposal that will harm lower-income employees. Finally, unlike private insurers, PEIA has balance billing that absolves employees of any payments not covered by PEIA beyond their deductibles and copays.
