Get PEIA Costs Under Control

One of the obstacles that blocked adoption of a new budget for West Virginia state government last month was the Public Employees Insurance Agency. Both legislators and Gov. Earl Ray Tomblin knew that unless they did something to boost state funding for the PEIA, there would be political trouble.

So once agreement was reached on the broad outlines of a budget — how much would be covered by higher taxes, how much by spending cuts and how much by transfers from the Rainy Day Fund — a side deal was finalized. It was that for the next four years, the state will provide an additional $15 million a year in subsidies to the PEIA.

That will be on top of the about $422 million a year taxpayers already provide for the PEIA. Yes, $422 million.

New funding is aimed at staving off some of the cuts in benefits to tens of thousands of retired and active public employees who rely on the PEIA for health insurance. Earlier this year, the agency’s board said that unless a massive infusion of state cash was provided, about $120 million in benefit cuts would have to be implemented.

The $15 million a year will not prevent all of those cuts, but perhaps it can avoid some of the most damaging ones — to retirees living on fixed incomes.

For years, some legislators have demanded reforms at the PEIA to at least slow the ever-increasing cost of the agency. Nothing meaningful was done along those lines this year.

But if something is not accomplished to get PEIA costs under control, bet on this: Next winter, PEIA officials will be back at the Capitol, demanding even more in subsidies.


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