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Delegates pass bill changing insurance finances for public employees

CHARLESTON — Delegates passed a bill making big changes to the insurance program for public employees after more than three hours of Saturday session debate.

And delegates later passed a pay raise bill recently described by state officials as a cushion for the increased insurance premium costs. The insurance bill and pay raise legislation have been moving in lockstep, described as intertwined.

The insurance bill wound up passing 69-27, with a robust debate over the solvency of the program and the state’s level of support for its workers. Public employees and representatives of labor organizations watched from the galleries.

“Elections have consequences,” AFL-CIO President Josh Sword commented to reporters after the vote.

The House made some amendments to the bill, such as dropping a requirement that would have required a 70-30 cost split for cross-border medical care, so those changes mean the Senate will still take another look. The governor has generally signaled approval.

Supporters of the bill in the Republican majority said the financial moves are necessary to keep the Public Employees Insurance Agency solvent.

“PEIA is $154 million in the hole. Failure to do nothing other than continue the current course we’ve been on by 2027’s plan year we get up to a deficit of $424 million,” said Delegate Matthew Rohrbach, R-Cabell, the deputy speaker. “Failure to act is not an option.”

Some members of the Republican majority disagreed.

“This hurts people,” said Delegate Dave Foggin, R-Wood.

The pay raise legislation has been described as an offset for the financial pain of increased insurance costs. Senate Bill 423 provides $2,300 across-the-board pay raises for educators and State Police troopers because their pay scales are set in state code. Raises for other state employees are meant to be dealt with more generally in the budget.

The pay raise bill passed 94-0.

Delegate Danielle Walker, D-Monongalia, wasn’t buying the trade-off.

“They’re going to have extra money? We don’t even pay a livable wage,” she said. “Nothing from
nothing means nothing.”

The insurance legislation, Senate Bill 268, makes a range of changes to PEIA, out of concern that the agency faces growing financial stress.

Before the session began, Wheeling Hospital announced it would move toward not accepting PEIA patients because of the low reimbursement rate. That raised alarm that other medical providers would do the same, and one aspect of this bill raises the reimbursement rate to 110% of what Medicaid pays.

A major goal of the bill is to return insurance costs to an 80-20 split between state government 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, estimated to be up to a 26% premium increase.

Another lightning rod in the bill would require spouses who have other insurance options to buy into the program if they want to participate in PEIA. That’s estimated to be a $147 monthly cost.

There are about 230,000 participants in the insurance program for public employees.

Delegate Sean Hornbuckle, D-Cabell, expressed his disapproval by holding up a platter and revealing an empty plate beneath.

“This is a nothingburger,” he said.