By Brad McElhinny, WV Metronews
The agency that oversees insurance for public employees is taking three new plan options on the road because of new legislation that will raise costs.
“We have to now reconvene and adopt a new financial plan based on Senate Bill 268,” said Jason Haught, acting director of the Public Employees Insurance Agency.
The main reason for the change is that a broad plan passed by the Legislature mandates a return to an 80-20 cost share between government employers and public employees. That ratio had gotten out of whack in recent years because of a reserve that state officials originally set up to hold premiums flat.
PEIA’s finance board went over the three possibilities on Thursday afternoon. Next week, public hearings will be in Charleston, Huntington, Morgantown and Martinsburg. And then next Thursday, the finance board is scheduled to meet again to decide which plan to use.
The first narrows any changes to premium increases only. For the state fund, that would mean 24.2% premium increases for employees, varying across the program’s different plans. For non-state funds, the option would mean a 15.6% premium increase. Retirees would not absorb any increase.
The second two options are described as blended approaches, raising premiums while also raising deductible and out-of-pocket costs.
The blended options also vary depending on what specific insurance plan each person has opted to take.
So, the first blended option anticipates raising premiums by 19.2% and non-state funds by 12.5%. Benefit changes would mean increasing medical deductibles and medical out-of-pocket expenses by about 25%. This would also double prices for prescriptions, a big concern that the board discussed.
The second blended option includes a 14.6% increase for state employees. Medical deductibles and out-of-pocket expenses would increase about 50%. Again, prescription drug costs go way up.
For workers in non-state plans that opt into PEIA, the second blended approach would mean a 9.7% premium increase along with medical deductible and out-of-pocket increases of about 35%. And again, prescription drug costs would go way up.
The PEIA Finance Board already took a plan out for comment last fall that had no premium increases at all. But with the new legislation signed by the governor, another plan has to be built.
Whatever change is decided will take effect at the start of the fiscal year, July 1.
“Let me start by saying, I don’t envy you,” West Virginia Education Association President Dale Lee told Finance Board members on Thursday. “We’re in a difficult situation not of your choosing. We understand that. My anger will come across, but I hope you know that it’s not geared at you. You have to play the cards you’re dealt.”
Lee described the increase in out-of-pocket costs for prescriptions as “a killer.” He suggested that the increased out-of-pocket costs in the blended plans could result in painful surprises. “If you have to use it or even have to go to the emergency room one time, you are not going to like this blended approach, correct?” he said.
The PEIA Finance Board, in a meeting that lasted about an hour and 40 minutes, discussed whether to narrow down the plans or to take all three out for public comment. The decision in the end was to offer all three as possibilities.
The first hearing is 6 p.m. Monday at the Culture Center in Charleston. There are two hearings on Tuesday: 6 p.m. at the Hampton Inn at Granville Square in Morgantown and also 6 p.m. at Mountain Health Arena in Huntington. And the final public hearing is 6 p.m. Wednesday at the Holiday Inn in Martinsburg.
Following the public hearings, the PEIA Finance Board will meet again to settle on one approach.
“Again, I don’t envy you,” Lee said, adding that next week “my guess is you’re going to see a lot of people who are going to be upset. And I will remind them that they shouldn’t be upset at you. You’re playing the cards that you were dealt. But that’s what’s going to happen.”