PEIA needs permanent fix sooner rather than later

March 29, 2019

The funding problem with the West Virginia Public Employees Insurance Agency looks like it will last a couple of years. Then more money must be found ... somewhere.

At a meeting of the PEIA Finance Board last week, PEIA Executive Director Ted Cheatham said the agency has money to get through the 2020-21 plan year without having to cut benefits or increase premiums. However, funding for the following year will be a problem, he said.

“We definitely will need new funding in 2021,” possibly in the range of $50 million to $80 million, Cheatham said, according to a report in the Charleston Gazette-Mail.

This year the legislature created a PEIA reserve fund and placed $105 million from this year’s expected budget surplus in it. So far this year, medical claims are running below projections and pharmaceutical costs likewise are below estimates.

That still leaves the need for a long-term solution to the PEIA funding problem, assuming one can be found.

Based on what happened last week, it appears the problem of PEIA funding will demand the Legislature’s attention next year, even if it appears the problem has been put off for at least a couple of years. Although funding is taken care of through this budget year and next, the problem will surface again. The sooner the Legislature and the governor address it, the better. They can’t expect a surplus every year.

Let’s face reality — the question of how to fund public employees insurance demands a thorough airing in the legislative interim meetings this year. It could be delayed until next year, but that would cut things close.

Options must be explored and evaluated in a public forum. If legislators spring the latest solution on the public the way they did their plan to “reform” public education with SB 451 this year, we will have another round of chaos that solves nothing. Given the ongoing back-and-forths over education, secondary roads and PEIA, solutions that solve nothing produce only more frustration. Frustration leads to anger. Anger leads to the dark side of politics where compromise is impossible and only scorched-earth victories count.

In theory, PEIA revenue and expenses are determined in a series of business decisions where needs and wants are weighed against available resources. But PEIA is a political animal as much as it is a business operation. You can call this latest news kicking the can down the road. Each year, it seems, the can gets bigger and bigger, so it’s more like rolling a barrel down the road. Sooner or later you come to the end of the road and the available options are few and painful.