Editorial: Proposal still leaves much unsettled regarding PEIA

January 15, 2019

A governor-appointed task force appears to have struck upon a plan that if enacted should ease the sting of rising health care costs for state employees covered under West Virginia’s Public Employees Insurance Agency program.

In fact, it was described as the first real step toward finding a “fix” to address rising PEIA health insurance costs for state employees - a key issue prompting the strike last winter by the state’s public school teachers and school service employees.

Looking short-term, task force members may be correct. But projecting long-term, it seems the state and its employees inevitably will be faced with similar issues in the years ahead - unless some magic cure can be found for the overall trend of rising health care costs. And that has been an elusive goal for decades with no apparent remedy in sight.

The proposal hailed by members of the PEIA task force is a change in state law. Currently, state law dictates that the state is responsible for 80 percent of the cost of premiums charged employees, with the employees picking up 20 percent of the tab for premiums. But as the PEIA in recent years has been faced with rising overall costs, the agency has imposed rising copays, deductibles and coinsurance payments - costs not factored into the state’s 80 percent share and falling directly on employees.

So the PEIA task force is proposing that state law be changed to make the state responsible for 80 percent of all costs - premiums, copays, coinsurance costs. That change, if approved by the Legislature and signed into law by Gov. Jim Justice, should lighten the load on state employees, at least initially.

However, it also means that the state will be responsible for a larger share of the costs than it is now. Last fall, Justice and legislative leaders pledged to allocate $100 million to find a permanent fix for the PEIA conundrum, and last week Justice upped that commitment on his part to $150 million. All or most of that money is to come from a budget surplus, according to the governor’s budget proposal.

But how far will that extra money go? As the search for a solution to the PEIA problem began, officials talked about how the insurance program was facing escalating costs amounting to $50 million a year. With that in mind, $150 million won’t last more than three years.

There’s also been talk about finding a permanent revenue stream for dealing with PEIA’s rising costs. But that’s not been determined yet, and even if one is found, the state still may be faced with throwing a bigger amount of money at PEIA each year.

While the proposed change to the 80-20 formula for allocating costs to the state and employees is a reasonable and worthwhile step, it seems clear that the state is still far short of finding that elusive “permanent” fix for the PEIA system.

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