Thinking About Privatizing PEIA

Failure to consider all options for West Virginia’s Public Employees Insurance Agency — even if that means uttering the “P-word” — would be a mistake.

The “P-word” is privatization. In regard to the PEIA, it would mean turning the program over to the private sector, rather than continuing it as a government-run entity.

For about six months, a task force appointed by Gov. Jim Justice has been studying the PEIA, which provides health insurance to tens of thousands of public employes and the families.

Much of the group’s focus seems to have been on finding more government funding for the agency, though there has been some talk of reducing costs. A target figure mentioned often for additional funding is $50 million a year.

Members of the task force are supposed to prepare recommendations for the governor and Legislature on how to proceed with the PEIA. But Justice says he is working on an entirely different idea than has been discussed.

Justice told a reporter he is investigating “from a privatization side, to completely explore that avenue to see if there’s a possibility of doing this in a BrickStreet way that we did before with workers’ comp…”

He referred to the BrickStreet insurance company, formed years ago as a replacement for the state-run workers’ compensation system. It had been bleeding money, costing employers and taxpayers too much. Privatizing workers’ compensation seems to have worked well.

Justice may be heading down a blind alley.

West Virginia University Vice President Rob Alsop, who played a role in workers’ compensation while an aide to then-Gov. Joe Manchin, has said comparing that program to the PEIA is “an apples to oranges comparison.” PEIA costs actually could go up under privatization, he warned.

Perhaps. But in the long run, we know PEIA costs will go up under the existing system.

Simply trying to find more taxpayers’ money to pump into the PEIA is no solution. The governor is right to think about privatization — and any other reform that could hold down both the premiums public employees pay and that amount drained from taxpayers’ pockets.


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