Task Force Subcommittee Weighs In on West Virginia PEIA
CHARLESTON — With the end of December just 26 days away, the task force looking at making the state’s public employee health insurance program more affordable will have some decisions to make.
The Coverage and Plan Subcommittee for the Public Employee Insurance Agency Task Force met Tuesday morning and approved several recommendations from West Virginia Gov. Jim Justice. The full task force will meet next week to discuss those recommendations and possibly approve final recommendations for the governor and the Legislature.
At the past two meetings, the subcommittee has worked on issues facing PEIA participants who work on border counties. The current system is set up to give incentives to participants who seek health care options in West Virginia. The governor’s recommendations would undo much of that.
The recommendations include returning Plan A benefits to an 80/20 co-insurance for participants in border counties only. Currently, the state pays 70 percent and the participant picks up the tab for the remaining 30 percent. For Plan B participants, the benefits would return to 70/30 co-insurance for participants in bordering counties.
Under Justice’s recommendations, the state also would remove the maximum facility fee limits for out-of-state facilities, remove a $25 copay for out-of-state services and put in place an appeal process for people requiring a third-tier non-preferred drug to allow for reduced copays. Justice wants a review of wellness programs to help encourage healthier lifestyles for state employees and reduce premiums.
“I believe these recommendations address the issues that will benefit PEIA recipients the most,” Justice said in a statement. “I appreciate the many hours of hard work all the members of the PEIA Task Force have put into this project and I look forward to seeing the final report in the coming days.”
According to Ted Cheatham, the director of PEIA, the gross cost of going with Justice’s recommendations — minus the proposed drug appeal process — would be $16.2 million. With a $9.2 million savings from a new third party administrator contract, the result would be a net cost of $7 million.
Cheatham said the appeals process would cost the state $1.84 million. The package would cost $9.8 million.
Cheatham said PEIA would operate under a loss. $47 million in fiscal year 2020, if the recommendations go through. By 2021, the state would need an additional $95 million for the state’s match, with employees and retirees paying $23 million for the 80/20 match.
“This is what the financial plan that we will take out will look like, Cheatham said. “Based on our conversations, I’ve already asked the actuaries to start pricing the governor’s recommendations in case you do pass this, so we’re working on that now.”
Mike Hall, Justice’s chief of staff, asked whether Cheatham included the $100 million that Justice proposed last month to put into PEIA for long-term stabilization. The money has to be approved by the Legislature during the 2019 regular session. Hall said the governor’s office is working on ways to absorb the $23 million so that state employees don’t see premium increases.
“That could mitigate that $95 million cost,” Hall said. “It could be done in a manner that might not incur premium increases for employees, even though that would cost more money. We’ll figure out how to structure it that way. That’s the intent.”
The subcommittee sent the governor’s recommendations to the full task force, which meets at 1 p.m. Dec. 11.