Crisis in the Classroom: What to do with PEIA?

CHARLESTON, W.Va. (WCHS) — Every year, just to keep up with medical inflation, West Virginia has to pour tens of millions of dollar into the Public Employees Insurance Agency. But that does nothing to solve the problem of finding a permanent funding solution to take care of the insurance needs of state workers.

In 2018, teachers stepped out of their classrooms for more than a week, sending a message to lawmakers at the state Capitol about pay and insurance.

They eventually got a raise, and Gov. Jim Justice promised that Public Employees Insurance Agency premiums and co-pays would not go up on his watch.

Justice has held that line, with the assistance of $105 million he placed in a PEIA rainy day fund to help pay for rising costs.

Work still remains to find a permanent solution to keep state workers' insurance affordable while still offering the coverage they need.

"Medical inflation for that group, it's my understanding, costs about $55 million to $60 million per year," Sen. Ron Stollings, D-Boone, said. "Health care costs are going up, there's no question about it. There needs to be an overall fix."

Sen. Mike Maroney, R-Marshall, said the problem must be addressed.

"It's just time. There was a crisis," Maroney said. "There still is a crisis, but you can't expect to have premiums, deductibles and co-pays held flat forever."

Last week, Maroney, who is the Senate Health and Human Resources Committee chair, proposed a bill that would have raised premiums for non-state workers with PEIA insurance. It was defeated, then resurrected and is now parked in committee.

"Our governor has promised that he's not going to raise PEIA," Maroney said. "He was talking about the state employees and retirees. The only remedy that I thought we could pass this year is these non-state employees. Counties, cities and political sub-divisions are coming in, so now they're going from premium insurance to PEIA."

Even if Maroney's bill passes, the money isn't enough to keep PEIA operating forever without premium and co-pay increases - that would require a much more ambitious allocation of money.

Stollings said the state of West Virginia "pays about $600 million a year. That's not changed much. The governor, in order to stabilize it, if you would, I think put in about $105 million in a reserve fund and I think we're going to get into it this year."

Maroney said he is anxious to do something about PEIA because it's an annual problem the Senate cannot ignore forever.

"For instance, on in-patient rates, which is what my bill addressed, PEIA pays 59% of Medicare," Maroney said. "Which Medicare, on some in-patient rates, doesn't even cover the cost of the care. Now we're getting 59% below the cost of care. It's a big deal. By the same token, PEIA will pay state hospitals triple that for the same stuff."

Stollings said getting West Virginians healthier and covered with affordable policies is the goal, but keeping hospitals open with fair reimbursements has to be a part of the equation.

"I've done semi-crazy things such as trying to get a fund to help with the hospital reimbursements," Stollings said. "The problem is hospital reimbursements are low compared to Medicaid and compared to Medicare. Something has to be done, It's my understanding it's going to be after the current administration is out. So the next administration is going to have to solve a problem."

It remains to be seen if lawmakers will take a swing at the PEIA this session. If nothing is done, premium increases of 9%, 16% and 12% are in the pipeline once Justice leaves office. It may be enough to once again prompt teachers to leave their classrooms to fight for their insurance benefits.

Maroney said when the issue is put in perspective "of what is happening to everybody, you have to accept your cost for insurance is going to go up. Whether or not you're in premium insurance, whether or not you're in Medicare or whether or not you're in PEIA, your cost is going to go up someday. You can't just live with a flat premium or co-pay or deductible forever. You can pay very, very little for insurance, but if you ever need it and there's no hospital to go to it's not going to do you any good."

Eyewitness News asked West Virginia Education Association President Dale Lee if there was any scenario where the union would accept insurance cost increases. Lee said a Blue Ribbon Panel recommended an 80%-20% split of the costs. Lee said there must be a permanent revenue source attached to PEIA for that to happen and right now there isn't one.

Lee also talked about the possibility of the state getting out of the insurance business and privatizing the agency. He said the union would fight that move, despite possibilities of early savings because chances are too great that prices would eventually skyrocket.