PEIA to Make Millions of Dollars in Cuts

Oct 18, 2016

The West Virginia Public Employees Insurance Agency may be facing millions of dollars in cuts - partially due to rising drug prices. Annual PEIA public hearings about the cuts are scheduled throughout the month of November. The public is encouraged to attend the hearings to voice questions or concerns. In the meantime, Kara Lofton talked with PEIA director Ted Cheatham about the proposal. Here are some highlights from that conversation.

On what is causing the cuts

The total cut package is close to 55-56 million. The cost of healthcare delivery and pharmacy delivery is going up every year. Health care is going up about 6 percent a year and pharmacy price increases is currently in the double digits.

What programs will the cuts affect?

Across the board we'll see higher deductibles, higher out-of-pockets and maybe changes to copays and coinsurance. Or perhaps we'll just see some changes in policies.

Is there an end in sight or will prices just continue to rise?

Boy I hate to tell you there's no end in sight because it seems like we've been doing this for years. I've been in this industry a long time, and we've said 20 years ago 'we can't sustain these type of increases' but we somehow manage to do it over the years. I don't see an end in sight. As I said last year, we're almost a billion dollar program, if the trend is 6 percent, that's60 million dollars a year we would need to sustain this plan.

How will consumers feel the impact of these cuts?

Oh they're not going to be happy at all. We have some very low paid individuals in the state that we take care of and they perceive this as a reduction in their overall compensation package from the state. Some people worry about being able to afford drugs or medications, go to the doctor when they are sick and take care of their kids - they are worried about that.

Costs are continuing to rise. Where are we going? Is there any hope?

I think that everyone is suffering from this. I think that the benefits are going to change. We need to decide as a whole how we are going to take care of our population.

Appalachia Health News is a project of West Virginia Public Broadcasting, with support from the Benedum Foundation.