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First PEIA Public Hearing Draws Criticism

The first of four public hearings held by the Public Employees Insurance Agency (PEIA) Monday drew criticism about changes to the plan.

The embattled agency has struggled with fiscal solvency and most recently, the announcement by one hospital that the insurance carrier would no longer be accepted. Senate Bill 268, which goes into effect July 1, was a concerted effort between the House and Senate to rescue PEIA by requiring a minimum 110 percent reimbursement of the Medicare rate for all providers, paid for in part by a 24 percent increase in premiums for employees.

About 50 people, including retirees and several educators, were present for the meeting at the Culture Center in Charleston.

PEIA Interim Director Jason Haught talked about the three plan options on the table.

The plan changes reflect the increase in premiums for active and retired state employees. Non-state agencies, retirees, spouses employed by PEIA-participating agencies, or spouses with Medicare, Medicaid or TRICARE coverage are exempt.

Effective July 1, significant changes to the plan include:

A surcharge for spouses of active policyholders – if they have coverage elsewhere but choose PEIA coverage instead.
A hike in premiums to return to a 80/20 employer/employee premium split
Increasing reimbursement to providers to a minimum of 110 percent of Medicare’s reimbursement.

The first of the three options discussed by Haught includes an increase in state employee premiums of almost 24 percent. The increase would vary since enrollment and performance vary from plan to plan. For the non-state fund there would be a 15.6 percent increase. No premium increase would be imposed on retirees.

Option 2 calls for a blended approach with a slightly lower increase in premiums (19.2 percent) but higher deductibles, and out-of-pocket and prescription costs to make up the difference.

Non-state plans that opt into PEIA under option 2 would see a 9.7 percent premium increase and medical deductible and out-of-pocket increases of approximately 35 percent along with a hike in prescription drug costs.

Option 3 is also a blended approach (State plan & RHBT) and would include a 14.6 percent premium increase with retirees being exempt. Changes to non Medicare include a medical deductible increase of 50 percent under plan tiers, out of pocket expenses, and an increase in prescription co-pays or drug costs.

Several retirees and former educators spoke to the panel about their concerns, including Rosa Huffman, a teacher in the Kanawha County school system. Huffman asked why the public is not being given more time to understand and decide on the proposed options.

“Why is this plan being rushed through?” Huffman asked.

Sen. Amy Grady, R-Mason, said comments that the PEIA plan was rushed through the legislature are unfounded.

“It hasn’t been rushed, and that’s the misconception,” Grady said. “This specific plan has been worked on for at least a year. I know I was reaching out to people, saying ‘Give me some input on this,’ I’ve no reason to believe other senators and delegates don’t do that.”

Grady said down the road the legislature may be able to consider taking money from the state’s “Rainy Day” fund to prevent an increase in costs for retirees, a suggestion put forward by West Virginia Education Association President Dale Lee.

When asked, the panel informed Lee that there was $74 million in the fund.

“Because I know that was a part of the fiscal note when you looked at Senate Bill version of 268 – whether the premiums would go up 14 percent or 26 percent based on the $74 million in the rainy day account,” Lee said. “I’m guessing that that money could still be used if the legislature appropriated the money, is that true?”

Haught responded, saying that it was his understanding that the expenditure side of the budget would not be completed until May 1st, but stated “theoretically” that was possible.

Del. Mike Pushkin, D-Kanawha, criticized the legislature for passing a bill that he said places strain on retirees.

“I mentioned the word arrogance earlier in regards to our current legislature, in regards to this super-duper majority,” Pushkin said. “I mentioned arrogance to raise premiums on public employees under the guise of a shell game of giving out a pay raise at the same time, while voting to give themselves a raise, a substantial raise for those in leadership.”

“They built into it cost of living adjustments for those at the top of the legislature, something they could not find it in their hearts to do for retirees for how many years?” he continued. “When’s the last time you got a cost-of-living adjustment if you’re a retiree?”

Pushkin contended that Gov. Jim Justice broke his promise when he said that premiums would not go up.

“When asked if he would raise premiums he said, ‘Not on my watch,’” Pushkin said.

Retired educator John Riddle told the panel that retirees are facing an ever-increasing cost of living.

“Let me tell you something, for 18 years of retirement, if you look at the cost of living, retirees on a fixed income are not in a very good spot,” Riddle said. “And all I’m asking you to do is to continue to allow our retirees to have a place at the table to talk with you.”

Three more public hearings are scheduled this week, including two on Tuesday at 6 p.m. in Morgantown at the Hampton Inn and in Huntington at the Mountain Health Arena. The fourth public hearing is on Wednesday at the Holiday Inn in Martinsburg.

The Finance Board will follow up with a meeting on Thursday, March 30 at 1 p.m. The board will consider comments from the public hearings and adopt the new Plan Year 2024 which will be published in the 2024 Shopper’s Guide.

Visit the PEIA website for more information on the public hearings.

School Retirees Oppose Potential Medicare Advantage Cuts

Members of the West Virginia Association of Retired School Employees are concerned about potential cuts to Medicare Advantage at the federal level.

The federal Center for Medicare and Medicaid Services (CMS) may cut Medicare Advantage payments by an average of 2.27 percent in 2024, according to a study done by healthcare consulting firm Avalere Health of an advance notice released by the CMS last month.

The agency itself, as well as federal officials like Department of Health and Human Services Secretary Xavier Becerra, pushed back against the claims and are projecting a 1 percent increase in payments instead.

Medicare Advantage, also known as the Part C plan, is offered by private companies to offer the same benefits as Medicare Parts A and B for lower monthly premiums, though that potentially also comes with higher out-of-pocket expenses.

Charmell Radcliff, president of the West Virginia Association of Retired School Employees, is concerned the potential cuts could result in fewer benefits and higher premiums for retirees. More than 192,000 people are enrolled in Medicare Advantage statewide.

“As a senior citizen on a fixed income, an estimated raise in premiums and a decrease in benefits would cost each one enrolled in the (Medicare Advantage) plan $45 a month, or $540 a year,” Radcliff said.

The association has reached out to those in the Biden administration urging them to protect the plan from cuts, including sending a letter to CMS Administrator Chiquita Brooks-LaSure.

A bipartisan group of 61 United States Senators have also expressed the same concerns in a letter to the CMS, including West Virginia Sens. Joe Manchin and Shelley Moore Capito.

“With 53 percent of Medicare Advantage enrollees living on less than $25,000 per year, combined with increasing pressures on Americans’ budgets, it is critical that older adults and individuals with disabilities continue to have stable access to these cost protections that are only available in Medicare Advantage,” their letter read.

The pushback comes at the same time unions, like the AFL-CIO, are opposing state Senate Bill 268, which would try to address the insolvency of the state’s Public Employees Insurance Agency by increasing health insurance premiums for those enrolled and removing spouses eligible for their own insurance from coverage. It passed the Senate Thursday and is currently in the House of Delegates.

Final rate payment changes for 2024 are scheduled to be announced by the CMS in April.

Senate Moves Budget, PEIA, Pay Raises In Saturday Session

The Senate returned Saturday afternoon at 1:45 p.m. after a brief recess to pass several important bills including tax cuts, pay raises for state employees and a budget.

With a compromise on tax cuts seemingly solidified with the passage of House Bill 2526, the Senate was able to pass Senate Bill 150 Saturday afternoon after suspending rules to advance it to third reading.

Senate Finance Committee Chair Sen. Eric Tarr, R-Putnam, said total appropriations in the budget would be just over $20 billion. He highlighted several changes to the budget’s original version, including changes made to reflect the dissolution of the Department of Health and Human Resources.

“Each of the state hospitals are broken out into their own budget item,” Tarr said. “This is the first step of many that will begin to separate DHHR into three entities.”

Tarr went on to say that the separation of DHHR’s budget into distinct items is part of a larger push for increased transparency into the department’s – or its successor’s – budgets, by far the largest single portion of the budget each year.

“Instead of seeing just a few pages for a $7 billion budget, we can actually see if they’re getting the money for what the state appropriates it for,” Tarr said.

Tarr also highlighted the appropriations for the Public Employee Insurance Agency pursuant to the completion of Senate Bill 268.

“There’s $49 million in increased reimbursement to health care providers so that we don’t have hospitals saying they don’t accept PEIA,” he said. “It also takes the plan to 80/20 so that it’s solvent for our foreseeable future.”

Tarr referred to the announcement by WVU-Wheeling Hospital just before the start of the legislative session that it would no longer accept PEIA patients starting in July due to its low reimbursement rates.

He also pointed towards more than $30 million in the budget for the implementation of the Third Grade Success Act, as well as money to address deferred maintenance in higher education and state corrections.

The budget would increase appropriations for the Department of Economic Development from $600 million to $900 million and sets aside $10 million for grant raises to go to Emergency Medical Service personnel as well as $50 million to have a National Cancer Institute in West Virginia.

“We have one of the highest incidences of cancer per capita in the United States,” Tarr said. “That National Cancer Institute allows for research into cancer so those patients who are having failed treatments…they now have a means to go get research medicine and get it in research programs with medicine given to them free of charge.”

Tarr ended his summary of the budget by emphasizing spending on dams.

“We’re finally getting a start on taking care of dams in West Virginia that are literally falling apart,” he said. “By doing that we’re gonna save community upon community from damage by floodwaters.”

Big Changes To PEIA

The longest debate of the afternoon surrounded Senate Bill 268, which aims to address the insolvency of PEIA.

Premiums for PEIA members have not been raised since 2012, and the agency currently only reimburses providers at half of the Medicare rate. On the first day of the session, the Senate passed Senate Bill 127 to increase the reimbursement of hospital rates to 110 percent of Medicare.

Senate Majority Leader Tom Takubo, R-Kanawha, explained the bill. He noted that the bill mandates what is known as an 80/20 split for costs between PEIA and employees. He also explained:

The bill removes a cap placed on the annual maximum benefit for Applied Behavioral Analysis.
The bill rearranges mandated benefits placed in other sections of the bill. These benefits included the section that relates to coverage for vaccinations, contraceptives, and group life insurance.
The Group Life Insurance language was amended to reflect that the group life and accidental death insurance is in the amount of 10,000 for every employee, but still allows you to get additional plans to them.
The bill provides that health programs may be offered in addition to existing language that provides PEIA may have wellness programs.
These programs are voluntary and for the participants and separate from any medical benefit.
The bill provides PEIA shall use networks to provide care to its members out of state.
The bill provides that an employee spouse that has health insurance available through another employee, then the employer may not cover any portion of the premiums for the employee spouse coverage unless the employee adds his or her spouse to his or her coverage by paying the cost of the actuarial value of the plan provided that this does not apply to spouses of retired employees.

Sen. Mike Caputo, D-Marion, raised a number of issues, including raises to employee premiums.

“What about the premium increases for each salary tier? As I understand, it can be 14 percent to 26 percent. Is that correct? And how’s that number determined?” he said.

Takubo explained that a higher salary individual with the more expensive plan with family coverage might see a 24 percent increase. He explained the $2,300 pay increase would help buffer the increase.

Caputo ended his statement by expressing concern for retirees on PEIA.

“I’m deeply concerned about the plan participants but I’m more deeply concerned about the retirees,” he said. “We did a little bit for those on the lower tier, but my concerns are this is going to put a huge burden on the folks that serviced the state for so, so many years for so little pay. And now the benefits are even going to be less and less.”

Senate Bill 268 passed on a vote of 29 to four. Caputo was joined in dissent by fellow Democrat Sen. Mike Woelfel, D – Cabell, as well as Sen. Laura Chapman, R-Ohio and Sen. Mike Stuart, R-Kanawha.

Gov. Jim Justice has previously pledged that there would be no PEIA premium increases while he was in office so it is unclear how he will react to the bill. One reason West Virginia teachers went on strike in 2018 and 2019 was proposed hikes to PEIA premiums.

Pay Raises For Some

Senate Bill 423 would allow for a $2,300 across the board pay increase for certain public state employees.

Those eligible for the raise include public school employees as well as employees with the State Police.

A pay increase for other state employees would be subject to the appropriations in the state budget.

Senator Mike Caputo, D-Marion, expressed concern to Finance Committee Chair Eric Tarr, R-Putnam, that the pay raise would not benefit all state employees. Caputo said he had received calls in the past from Department of Highway workers whose salaries are not in the code.

“Do you feel confident that every state employee will get a $2,300 across the board raise whether they are a teacher, or whether they drive the snowplow truck?” Caputo asked.

Tarr responded he was confident that every state employee would receive a pay raise.

“Those agencies… it’s up to them, whether they decide they go up to $2300 because that is not what this law contemplates. The bill before you contemplates a $2,300 pay raise for state employees whose salary is set in the pay schedule and state code,” Tarr said.

Caputo further pressed Tarr for an answer to his question.

“I just want to make sure that everybody believes that there’s money out there for everybody to get a pay raise,” Caputo emphasized.

“We have provided the spending authority in the budget. It’s up to the governor for anybody that’s not a general revenue. When’s the last time we gave a pay raise that didn’t happen?” Tarr responded.

Health And Human Resources Committee Discusses PEIA

The Senate Committee on Health and Human Resources Thursday took up the issue of PEIA reform. PEIA is the insurer for thousands of public employees. It has come under increased scrutiny for paying more in reimbursements to out-of-state hospitals than to in-state facilities, including WVU Medicine Wheeling Hospital.

The Senate Committee on Health and Human Resources Thursday took up the issue of PEIA reform.

PEIA is the insurer for thousands of public employees. It has come under increased scrutiny for paying more in reimbursements to out-of-state hospitals than to in-state facilities, including WVU Medicine Wheeling Hospital.

The hospital in January announced plans to stop accepting the state’s public employees’ health insurance (PEIA) by July 1.

Senate Bill 268 would change the requirement that PEIA conduct public hearings in each congressional district. It also repeals two sections of code related to retiree premium subsidies prior to 2010 and removes a cap on autism services.

The plan sets a minimum of a 20 percent cost share for in-state benefits when applicable, and a minimum of a 30 percent cost share for out-of-state benefits when applicable. That essentially attempts to level out the amount set by insurers for out of state and for in state co-payments.

The plan states that the Public Employees Insurance Agency shall use a nationally accredited network to provide care to its out of state members to bring down costs through the benefit of a larger network.

Sen. Tom Tabuko, R-Kanawha, wanted to confirm that the bill would not affect payment for critical access hospitals.

“I just want to confirm here that critical access hospitals, a lot of smaller communities throughout West Virginia, obviously depend on those because without them they may be an hour and a half away from any type of care whatsoever, they exist because they can get a higher rate,” Tabuko said.

Committee counsel directed the senator to confirm the answer with the West Virginia Hospital Association.

The plan would provide a minimum level of 110 percent be established for all providers.

The rate for hospitals would be set at 110 percent of the Medicare diagnosis related group covered by the state and non-state plans of the Medicare per diem per day rate applicable to critical access hospitals and exempts from rate setting a retiree health plan.

The bill deletes the requirement that the governor to provide an estimate for each fiscal year based on the percentage of growth and general revenue funds.

During committee discussion Sen. Mike Maroney, R-Marshall, asked Jason Haught, interim director and chief financial officer for PEIA, about rates, specifically if hospitals are allowed to negotiate with the PEIA for inpatient rates, or not.

“You know, that term negotiation, I believe…,” Haught started to say.

“Ah you used it, you, you really used it,” Maroney interjected.

Haught continued, “And I believe that we do allow negotiation with our in-state providers. The one that we’re talking about right now was done in 2002 with the West Virginia Hospital Association, and PEIA and the Department of Health and Human Resources, Bureau of Medical Services. They all sat down, came up with this Medicaid swap reimbursement that pulled in additional money for the hospitals, and it just ran stale. It didn’t it needed to be re-discussed and updated, and it just didn’t occur.”

Maroney went on to ask Haught about the last time PEIA premiums were raised.

“For the state fund, I believe it was 2018 or 2019,” Haught said. “The non-state pool obviously had one last year.”

The last time PEIA was allowed to negotiate prices on drug costs, for example, was 2002 when the interested parties came up with a plan that pulled in additional money for the hospitals.

The committee ended with a motion to send Senate Bill 268 to the full Senate with recommendation it pass after going to the Committee on Finance.

Parents Urged To Check Insurance Status Ahead Of Likely Winter Illness Surge

As medical experts warn parents of a possible "tridemic" of RSV, flu and COVID-19, a pediatrician says it’s a good time to check your child’s health insurance in order to avoid medical debt.

As medical experts warn parents of a possible “tridemic” of RSV, flu and COVID-19, a pediatrician says it’s a good time to check your child’s health insurance in order to avoid medical debt.

Around 60 percent of kids are covered by Medicaid or the West Virginia Children’s Health Insurance Program, better known as CHIP.

Families using these programs for insurance coverage have been automatically re enrolled during the current COVID-19 federal public health emergency.

The public health emergency will remain in effect until mid-January, and the Department of Health and Human Services has promised to give 60 days’ notice ahead of letting the public health emergency expire.

But Dr. Jennifer Gerlach, vice president of the West Virginia chapter of the American Academy of Pediatrics, said now is the time to verify children’s insurance status ahead of any federal changes or costly medical bills.

“We don’t want it to be a situation where it’s harder for parents to seek health care for their children because of their health insurance status,” Gerlach said. “We want to make sure everyone is covered … so West Virginia children can get help when they need it.”

Health care accounts for one of the country’s leading sources of debt, and NPR reported more than 100 million Americans are saddled with medical debt.

Gerlach, who also serves as the state’s medical consultant for CHIP, said Medicaid and CHIP applications are down 30 percent.

Once the public health emergency is lifted, families will have to re enroll in Medicaid and CHIP.

“We want to make sure families are re enrolled so they don’t lose their coverage,” Gerlach said.

Contact the West Virginia Department of Health and Human Resources to check the status of Medicaid and CHIP coverage.

PEIA Faces Long-Term Funding Challenges

A five year outlook published by the Public Employees Insurance Agency (PEIA) keeps state employee premiums at zero through 2027, but anticipates transferring in more than $375 million in public funds to shore up the program.

At a PEIA Finance Board meeting Thursday, CFO Jason Haught laid out a 2024 draft plan that was approved to go to the next step — public hearings.

The 2024 projected plan does include some deductibles and out-of-pocket adjustments.

Under-performing stock market investments and resuming pandemic-delayed elective medical procedures helped create a $92 million deficit in 2022. In 2018, rising insurance premiums and no pay raises sparked a statewide teachers strike.

Gov. Jim Justice has pledged to keep premiums flat during his terms in office. Following the teacher strike, he established a $100 million reserve fund to cover any rising insurance costs. The PEIA long-term outlook figures use all of that funding for 2023 and 2024, with nothing available after that. The concern is the rising costs going into the next gubernatorial cycle.

PEIA Chairman Mark Scott said the agency plans on resuming funding discussions to cover the long-range cost projections and avoid benefit reductions.

“There are discussions ongoing with the legislature about ways that we might be able to impact these price increases going forward,” Scott said. “We are definitely willing and wanting to listen to ideas from all parties on the ways that we can keep these costs from increasing as high as we estimate.”

The 2024 plan will be presented at a series of statewide public hearings, beginning next week.