Justice to future governors: PEIA is difficult to manage, keep WV employees in mind

By Autumn Shelton, RealWV

CHARLESTON, W.Va. – Gov. Jim Justice has some advice for soon-to-be Gov. Patrick Morrisey, any future governor, and the next state legislature regarding potential premium increases for the Public Employees Insurance Agency (PEIA).

“I would advise, or recommend rather, to any future governor, and everything, that this is not easy to handle,” Justice stated during his regular media briefing on Tuesday. “I mean that’s all there is to it.” 

Justice went on to say that throughout his administration he tried to prevent increases in PEIA premiums and deductibles. 

“We kept premiums and we kept ‘em flat . . . we went almost six years without any increase whatsoever,” Justice said. “We funded it through surpluses or rainy day dollars or whatever it was, and everything, we did that because I truly believe that our state employees work really hard, and they do really good work.” 

Justice said one of the most important roles of the governor is being a “business guy,” or having the ability to surround oneself with people who “know numbers.” 

“Because if you don’t, you are going to lay real burdens on people,” Justice continued. “Just think, through that six year period . . . we were flat for all practical purposes in regards to the premiums or the costs, and then we went to an 80/20 plan.” 

In 2023, in an effort to keep PEIA solvent, the state’s legislature passed Senate Bill 268, the West Virginia Employees Insurance Act.

In addition to pushing through an 80/20 plan, this legislation mandated a PEIA reimbursement to all medical providers at 110% of the Medicare rate. 

According to legislative discussions at the time, the goal of this bill was to prevent a situation where providers no longer accepted PEIA due to low reimbursement rates.

During a recent public hearing held in Beckley regarding current proposed PEIA rate hikes, PEIA Director Brian Cunningham explained that the Medicare reimbursement mandate increased the rate paid by PEIA to healthcare providers working in inpatient hospitals “more than $70 million year-over-year.”

Additionally, Cunningham said that, “At the same time, it pegged it to the Medicare Index (the fluctuating rate by which Medicare reimburses healthcare providers). The Medicare Index goes up every year, somewhere between three and seven percent. On a $1 billion insurance plan, if reimbursement to providers goes up five percent, that’s $50 million that PEIA has to cover.”

Now, to cover these increasing PEIA costs, the current proposed rate hike centers around a flat 14% premium increase, a more than double increase in the spousal surcharge rate, a $150 increase in inpatient and outpatient service copays, a $100 increase in emergency room copays, and an increase in prescription copays, with generic rates going from $10 to $20 and brand name drug rates going from $25 to $50. 

According to Justice, when the 80/20 plan came to fruition, his administration tried to keep PEIA costs down with pay raises and tax breaks. However, West Virginia Education Association President Dale Lee has stated during public PEIA hearings that this approach isn’t working. 

“All those pay raises did was keep us level, and know that in three years those pay raises cost us a 24% premium increase under the 80/20 plan,” Lee said while in Beckley. 

During his briefing, Justice noted that those pay raises and tax breaks “didn’t matter” to many employees due to the rising costs of living. 

“Our families are hurting in every way in the world and are doing everything they can to get by,” Justice said. “And so, from the standpoint of the future governor, my advice would be ‘feel that and know that.’ 

For those who still wish to make their voices heard regarding the proposed PEIA rate plan for 2026, there will be one more public hearing on Nov. 21 in Charleston at The Culture Center. 

Those who have not been able to attend an in-person meeting may submit their comments to the Finance Board at 601 57th St. SE, Suite 2, Charleston, WV 25304-2345, or by email to PEIAComments@wv.gov​.