At public hearings throughout the state, West Virginians have expressed concern, frustration, and disappointment at the Public Employee Insurance Agency’s (PEIA) plan to raise premiums and copays this coming July.
Several West Virginia Public Broadcasting reporters attended the November hearings to speak with some of the more than 200,000 state employees relying on PEIA for health insurance. Many said they would reconsider employment with the state if the plan is implemented.
Tena McElwain is a bus driver for Monongalia County Schools and the county’s American Federation of Teachers (AFT) service personnel president. She attended a public hearing and accompanying rally on Nov. 19 in Morgantown.
From McElwain’s perspective, the proposed increases would cut even further into paychecks and make vacancies harder to fill.
“Right now there’s a shortage in Mon County for bus drivers, secretaries, aides, custodians, cooks, because of the PEIA increases,” she said. “We’re more or less working to pay insurance. We’re not taking anything home after PEIA comes out. We still have bills.”
PEIA released the proposed changes at its October 2024 board meeting. They are set to be approved Dec. 5.
Plan changes, along with public hearings, are an annual process. But the proposed increases are higher than normal, coming after two years of rising operational costs. In an October special session, the West Virginia Legislature approved $87 million in stop-gap funding to prevent a mid-year premium raise.
The PEIA Finance Board’s proposed changes include a 14 percent premium increase for state employees, a 16 percent premium increase for local state employees, and a 12 percent premium increase for Medicare and non-Medicare retirees.
Under the plan, deductibles and out-of-pocket maximums will rise by 40 percent — an average increase of $355 for state employees and $310 for local state employees. Copays for inpatient and outpatient services will also increase significantly: For example, surgery copays will rise from $100 to $250.
The Recent History Of PEIA
Gov. Jim Justice pledged to keep premiums flat while in office. Following the 2018 statewide teacher strike, he established a $100 million reserve fund to cover any rising insurance costs. However, amid cost increases, intermittent short-term funding and declining enrollment, PEIA members have seen a series of premium hikes that started in 2023.
Now, Justice will assume a new role in the U.S. Senate in January, and questions about the agency under a new administration and legislature next year have lingered. PEIA’s proposed rate hike seems to provide an answer, but one that is not popular among many state employees.
“I don’t understand why my copays go up and up and up to the point that I can’t afford to live yet I can’t afford to die at this point,” Michael Kimball said at the Nov. 11 virtual hearing.
The Finance Board says it has to raise the rate because of inflation and the growing cost of prescription drugs.
In particular, GLP-1s, a class of medications that manages Type 2 diabetes and obesity, cost PEIA $52.5 million in the 2024 fiscal year. That marked 20 percent of the agency’s net spending on drugs, PEIA Director Brian Cunningham said during a November meeting of the legislature’s Joint Standing Committee on Insurance and PEIA.
On Nov. 26, the outgoing Biden administration announced it would ask Medicare and Medicaid to cover the cost of GLP-1 obesity medications. The incoming Trump administration would have to approve the measure for it to go into effect. Meanwhile, PEIA is now phasing out all prescriptions of these drugs to manage weight loss.
In March, PEIA canceled a 1,000-person pilot program that covered weight-loss drugs due in part to the program’s cost to the state. However, advocates of the program say the state will end up paying more for health complications caused by obesity.
Another contributing factor to rising costs is the passage of Senate Bill 268 in 2023. It required PEIA to increase reimbursement to health care providers, mandated a spousal surcharge and formalized the 80/20 rule, which requires insurance companies to spend at least 80 percent of the money they make from premiums on health care costs and quality improvement activities.
The bill also required PEIA to increase reimbursement to health care providers to 110 percent of Medicaid reimbursements. This cost PEIA $70 million more than anticipated in 2024, according to Cunningham. The Joint Standing Committee on Insurance and PEIA is scheduled to discuss a draft bill that would walk back that reimbursement requirement during their Dec. 9 interim meeting.
“What we see at PEIA is that we are overpaying compared to national averages for some services,” Cunningham said at the committee’s Nov. 11 meeting.
Cunningham also pointed to rising health care costs nationally and “floodgates” opened to delayed procedure scheduling after COVID-19 shut down some providers.
Speaking at the public hearing in Morgantown, West Virginia Education Association (WVEA) President Dale Lee — who led the 2018 teachers’ strike and served as a member of Gov. Justice’s 2018 to 2019 PEIA task force — said the roots of the current issues with PEIA go back far beyond Senate Bill 268 or rising costs.
“We had the PEIA Task Force, which I was proud to be a member of. The task force came up with a bill that would have provided stability to PEIA over the years,” he said. “Part of that bill was language on funding, language on the 80/20, and several other pieces in that bill. We have introduced that bill every session since January of 2019.”
Chris Shulz/West Virginia Public Broadcasting
In April 2018, then-PEIA Director Ted Cheatham said the agency would need $50 to $70 million annually to maintain the program, anticipating health care inflation and rising costs.
When teachers went on strike in 2018, they focused on issues of rising health care costs and stagnating pay. That February, Justice signed an executive order creating the PEIA Task Force in response to union health care demands at the same time he announced a teacher pay raise. Teachers ended the strike when Justice signed the 5 percent pay raise into law.
The task force last met in January 2019. It did not deliver a report on how to provide that sustainable funding.
Lee went on to say that despite having the support of Senate President Craig Blair, who was Senate Finance Chair when the proposals were first made, the bill has never advanced to a committee agenda, let alone the state senate’s floor.
“In my opinion, it’s retaliation for the actions that we took in 2018 and 2019,” Lee said. “Folks, it’s time to end those retaliatory actions, and it’s time for us to come back to the table and figure this out.”
Teachers At Public Hearings
WVEA had affiliates attend meetings throughout the state. Diana Adkins, a retired teacher who began her career in the 1980s, attended the Charleston public hearing Nov. 22 as the co-president of the Kanawha County Education Association, a local affiliate of WVEA.
“Every time I say it can’t get any worse, I find myself wrong,” Adkins said ahead of the hearing. “It can get worse, and we must attract good educators.”
Jamela Brown, a family support specialist at Kanawha County Schools, attended the hearing as a school liaison for WVEA.
“It’s greater impact with the group,” Brown said. “When you’re by yourself, you don’t know. Since I’m new to this scene, I didn’t know a lot of things. So I needed more people like [Adkins], who just spoke, that gave me some more information.”
She said, in her capacity as a social worker running a food pantry at three schools, she sees pre-existing financial need among teachers. She called for more organizing from the ground up.
“I don’t see one person in any of my schools here tonight, not one,” Adkins said at the end of her public comment. “That’s a problem to me. I don’t see anybody who looks like me in here tonight. That’s a problem.”
Teachers on a Nov. 18 virtual hearing included Jo Frost, a teacher at Woodrow Wilson High School in Raleigh County. She said current salaries do not cover teachers’ expenses, but they have continued to work state jobs for benefits and out of passion for their work.
“Teaching used to be pretty good in West Virginia. But then the cuts started, and then they continued,” Frost said. “Health care for public employees in West Virginia used to be pretty good, but then there were cuts statewide. There are approximately 5,000 unfilled state employee positions. Could a dismal outlook on insurance be contributing to that problem?”
Frost said it feels like nobody is taking care of teachers, especially when their health care provider is cutting coverage.
“We have begged you time and again to push back harder in these negotiations. We are begging again,” she said. “Protect our seniors, our state employees, our students, our retirees, because no one else is. Disambiguation is popularly called the death of 1000 cuts. I’m here to say that’s what’s happening to teaching in West Virginia.”
Chris Shulz/West Virginia Public Broadcasting
Cullen Hencke, another Monongalia County teacher and the vice president of the local AFT chapter, said at the Nov. 19 Morgantown meeting that teachers and school personnel are not the only ones the rate increases will impact.
“Sometimes we’re the loudest voices about these issues, but we know that they affect lots of other people who West Virginians care about and look to and in times of need,” he said.
Other State Employees, Retirees
Other sectors of state employees, however, do not have organized unions with decades of experience like WVEA.
Jeff Hutchinson, Kanawha County parks director, said he was there on behalf of his staff.
“I have probably one of the smallest staffs in the room, but I have a lot of employees that don’t make a lot of money,” Hutchinson said. “So these increases — I’m here because I see my people every day, and they’re all worried about this.”
Hutchinson said he returned home to West Virginia after working in the private and public sectors in other states.
“I’m a West Virginian. This is my home. This is where I choose to be,” Hutchinson said. “I’m getting to the age where I can retire. I’m the highest paid employee in my agency. I make a fairly good living for West Virginia. I’m not going to say that I don’t. If I were to retire this month, half of my retirement would go for my insurance. That’s crazy.”
Caelan Bailey/West Virginia Public Broadcasting
Retirees on the virtual call said they worked their lives for their retirement, and the rate increases will not be feasible on a fixed income.
“I could go through point by point about all the increases, and I realize what the Finance Board is trying to do,” John Riddle from Jackson County said during the virtual hearing. “You’re trying to balance the act, you’re trying to help us in that manner. But I’m telling you, folks, for retirees on a fixed income — and I don’t have to tell you, folks this and everyone in this room on a fixed income — 14, 15 percent increases in anything is draconian to us. I mean, it’s unbearable. We have no way of catching up.”
Marica Mason, executive director of the Kanawha County Ambulance Authority, spoke to the Finance Board about the urgency of benefits for first responders.
“If you would suffer a health care crisis, you would hope that your local emergency medical service agency would respond quickly with the best care possible from well trained emergency medical technicians and paramedics,” Mason said.“I ask that you, as well as the legislators that may be here this evening, pay attention.”
Possible Solutions
PEIA will once again require legislative intervention in next year’s legislative session, which is delayed until February because of the inauguration of incoming governor Patrick Morrisey.
“We’re saying all the same things, and it’s all the same problems [that] keep reoccurring because it hasn’t been a priority of the legislature or the executive branch for that matter,” said Del. Mike Pushkin, D-Kanawha and chair of the state Democratic party, during the Charleston hearing, referring to years of stop-gap funding but no long-term funding solution.
Del. Joey Garcia, D-Marion, was recently elected to the state senate for District 13. He spoke to the Morgantown rally ahead of the hearing. He said PEIA’s problems were created by the legislature, and can be fixed by the legislature, too.
“They’re fixes that an incoming governor can propose when we get into the legislative session this coming February,” Garcia said. “I’m hopeful, I think these people here are hopeful that their voices will be heard. I just said a second ago, you can listen, or you can actually look at something, and see where people are. I think that’s what we’re going to see a lot tonight, about how this has affected people in their pocketbooks.”
Pushkin said he anticipates Republican lawmakers will move to privatize PEIA.
“With this incoming administration and with these two super majorities in the legislature, there’s going to be a big push to privatize your insurance,” Pushkin said. “So we need to fight back on that with every chance we get and push back on that.”
But, as West Virginia Watch reported this week, legislative leaders have indicated they do not have a clear path forward for the beleaguered insurance program, leading some to theorize that privatization may be on the table.
Chris Shulz/West Virginia Public Broadcasting
In Morgantown, Lee called the possibility a “terrible idea for the employees,” and pointed out that almost all of PEIA’s funding goes to benefits, and not administrative costs.
“In the private sector. It’s more like 20 percent administrative costs, 80 percent private bank costs,” Lee said. “We’ll have companies that will come in and say, ‘We can privatize this and save you a whole lot of money right now.’ And yes, they can, in the beginning. Because they are for-profit companies, that cost is going to go up and up and up, and we will have no choice.”
Lee also said affordability will likely become an issue. PEIA payments are based on an enrollee’s income, whereas private insurance almost always offers flat rates to all customers. He said that privatizing PEIA means public employees are being forgotten by fellow public employees: the staff of PEIA.
“There’s only 55 of them, so we don’t have a huge administrative cost, remember, it’s less than eight percent,” Lee said. “But they’re West Virginians, and they understand the issues that we face each and every day. So if you have something that’s denied, or medicine that’s denied and you really need, you make a call to Charleston and we get it resolved.”
Further complicating a push for privatization would be attracting a provider. Cunningham told lawmakers that there is no interest from the private sector to take on PEIA’s patient portfolio.
“What I hear from the gallery quite often as well [is], ‘Let’s privatize PEIA.’ So we open up a bid, we release a procurement and say, ‘Private entities, please provide PEIA members insurance,’” Cunningham said during the November committee meeting.“We didn’t get any additional bids. That did surprise me.”
The PEIA Finance Board is considering comments on the proposed changes until Dec. 4. Those who wish to comment can email PEIAComments@wv.gov, or submit mail to 601 5th St. SE, Suite 2, Charleston, WV 25304.
