PEIA redesign group to look at other states

August 27, 2018

A group looking to shape the future of Public Employees Insurance Agency coverage will start by looking at health insurance plans offered by governments in other states.

“We want to know, what do other states offer in the forms of plans?” Rob Alsop, a vice president at West Virginia University and chairman of the PEIA Task Force’s coverage and plan subcommittee, said Friday.

Alsop stressed that his subcommittee will look at other public employee insurance plans, rather than private-sector coverage. He said he doesn’t believe it’s a viable idea to privatize PEIA, as occurred with workers’ compensation coverage a dozen years ago.

“It’s a completely different environment,” Alsop said. Privatization “is not something for our public employees that I think is a viable situation.”

In its first meeting since May 23, subcommittee members reviewed the 22-page report of the Task Force’s public outreach subcommittee, which summarized comments and recommendations made at 21 public hearings statewide and in more than 3,000 surveys.

One key issue discussed Friday was wellness programs, a topic of contention at the hearings. PEIA canceled its Go365 wellness plan earlier this year after complaints from insurees.

Under Go365, participants who met goals for wellness and physical activity would receive gift cards and other rewards, while those who failed to meet thresholds or to participate in the program would have been subject to higher premiums and deductibles.

“I think there’s an appetite for wellness from what I can see from the report, but I think they like the carrot more than the stick,” Alsop said.

However, Geoff Christian, a senior vice president with Assured Partners West Virginia and a PEIA Finance Board member, noted, “Carrots are nice. Sticks work better.”

Christian said it is critical to promote effective wellness programs now to avoid even faster-growing health care costs in the future.

“What scares me and what scares every employer I work with is diabetes and obesity, and it’s only getting worse,” he said, noting that insurees with diabetes or who are obese tend to have much higher health care costs.

Ted Cheatham, PEIA’s executive director, said wellness programs are only effective to the extent that people use them.

“Every wellness program, we believe, I believe, has to have some personal accountability to get results,” he said.

Cheatham offered the panel some good news Friday: PEIA health care costs have come in lower than projected this year, so the insurance program should be able to get through the 2019-20 plan year without having to raise premiums or cut benefits.

“In general, PEIA has had a very good year,” he said.

Cheatham said PEIA has also been able to renegotiate its Humana Advantage plan for retirees to save $20 million a year over the next two years, and to renegotiate its pharmacy benefits plan for one-time savings of $20 million.

However, he said the short-term savings does not change the fact that funding for PEIA will need to grow by about $50 million a year in future years to maintain current benefit levels.

Sen. Robert Plymale, D-Wayne, said finding that additional funding in future years is a major concern.

“You have to do something to alleviate that $50 million hole you have each year,” he said.

The panel is tentatively planning to meet again Sept. 18, in conjunction with a scheduled meeting of the Task Force’s cost and revenue subcommittee.

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