Delegates started moving a bill making several changes to the insurance plan for public employees, Gov. Jim Justice praised lawmakers for their work on the plan, and union leaders plan to discuss their concerns Friday in front of the House chamber.
Over the next few days, the full House of Delegates will consider the changes.
The House Finance Committee discussed and advanced the bill Thursday afternoon. The full House completed the first of three looks at the bill on Thursday evening. That means the bill could be up for amendments on the House floor as soon as Friday and passage after that.
“Unfortunately, as the Legislature and other policymakers are prone to do, with some of these thorny issues we just kick the can down the road,” said Delegate Paul Espinosa, R-Jefferson.
“Kicking that can down the road has resulted in a public employees insurance program where if we don’t do something within the next few years, I mean we’re looking at serious issues with that plan — actually, to the point where we’re already seeing providers saying ‘We’re not going to accept that plan any more.’ ”
Senate Bill 268 makes a range of changes to PEIA, out of concern that the agency faces growing financial stress.
“PEIA is in a dire financial position,” Dr. Peter Shirley, director of the Legislature’s Division of Regulatory and Fiscal Affairs, told members of the House Finance Committee on Thursday afternoon.
The Finance Committee discussed and passed the broad-ranging PEIA bill over more than two hours Thursday afternoon. They also passed a separate bill for $2,300 cross-the-board pay raises for State Police and teachers, whose pay scales are set in code. Other state employees are meant to get the same raise through the budgeting process.
Delegate Larry Rowe, D-Kanawha, was incredulous about the tradeoff.
“Are we really saying you’re going to get a pay increase of a couple thousand dollars and we’re going to take it off through an increase in PEIA premiums?” he asked.
Finance Committee members did make a couple of changes to the PEIA bill.
People with PEIA have been allowed to receive medical care from out-of-state providers, subject to an 80-20 cost split. An earlier version of the PEIA bill would have changed that cost-sharing ratio to 70-30.
Delegates approved an amendment to keep the 80-20 for over-the-border care.
Another amendment dealt with long-time state employees who have left government work but who are not yet old enough to qualify for the program for retirees. The original bill would have zeroed them out, but delegates approved an amendment allowing them to still opt in.
There are about 230,000 participants in the insurance program for public employees.
One of the major goals of the bill is to return insurance costs to an 80-20 split between the employer and employees.
That has been the cost ratio set in state code, but it has gotten out of whack over the past few years after the governor and the Legislature established a reserve fund. The governor has promised no PEIA premium increases for employees during his time in office, which concludes in 2024.
With premium increases essentially capped, state officials have said the effect has been making the ratio actually more like 83-17.
A five-year PEIA outlook released last year anticipates keeping employee premium increases at zero through 2027. But costs to the state would go up exponentially over those years.
By 2027, the outlook anticipates, state government would have to transfer an additional $376.5 million in public funds to bolster the insurance program.
A return to 80-20 could mean a significant and rapid adjustment for employee out-of-pocket costs.
Some aspects of the bill spell out the fiduciary responsibilities of the members of PEIA’s finance board. It has a requirement for the director to provide a number of people covered and a five-year fiscal analysis of the cost of covering claims. There’s guidance for the PEIA finance board to base its conclusions on an 80-20 employer and employee match.
The bill also requires an actuarial study to address the financial solvency of the plan.
Another component would improve reimbursements to medical providers to 110 percent of what Medicare pays. That issue became a frontburner matter when Wheeling Hospital announced it could no longer afford the state’s low reimbursement rate. After Wheeling Hospital said it would no longer take patients covered by PEIA, concern arose over whether other hospitals would follow suit.
Worker organizations have questioned effects on spousal coverage and rising premium costs. Lawmakers working on the bill have said it would not remove spousal coverage, but does include a buy-in for spouses who are not covered by PEIA for their own employment.
Multiple unions will highlight effects such as premium increases up to 26 percent during a Friday morning press conference on the House steps.
“Slow this thing down, slow it down,” said Joe White, executive director of the West Virginia School Service Personnel Association.
Gov. Jim Justice said the proposed pay raise along with a tax cut under consideration will lessen the sting.
“It’s not too bad a tradeoff in my book in any way,” he said during a briefing today.
The governor added, “We need to give the powers that be credit where credit’s due. So, from the standpoint of the Senate and the House they now have a methodology. And we know — let’s be brutally fair — I mean, for crying out loud we know with medical costs escalating all the time, we can’t say forever more that we’re going to be at a certain level.”
