Justice urges PEIA task force to 'shake up the world'

Kicking off the first meeting of the Task Force on PEIA Stability, Gov. Jim Justice urged the 29-member panel to “shake up the world” and find lasting solutions to control rising costs for the health plan for more than 200,000 West Virginians.

“I’m wanting you to find a solution, and not wanting it to take forever,” Justice said in brief introductory comments. “It is massively important to the state. This is a ticket number that’s gigantic, and it’s growing every day.”

Justice issued an executive order Feb. 28, in the midst of the statewide teachers’ walkout, to create the panel in response to teachers’ demands for a “fix, not a freeze” on seemingly yearly PEIA premium increases and benefits cuts.

During a 38-minute organizational meeting, the panel of legislators, teachers’ union representatives, public employees and retirees, and “at-large” members with expertise in insurance or health care, voted to divide up into committees to focus on three specific areas:

  • Comprehensive plan review.
  • Cost and revenue.
  • Legislative and public outreach.

Task force chairman Mike Hall, Justice’s chief of staff, called on the latter group to meet prior to the task force’s next meeting on April 10, to begin scheduling a series of public hearings around the state on PEIA.

Justice’s executive order calls on the task force to deliver a final report and recommendations prior to legislative interim meetings in December, but Hall said he hopes the report can be completed before the PEIA Finance Board meets in November to tentatively approve premiums and benefits for the 2019-20 plan year.

“We don’t want them to do a plan that nobody likes, and a month later, we tell them what they should have done,” Hall said.

Senate Finance Chairman Craig Blair, R-Berkeley, one of the senators that teachers directed their wrath at during Capitol protests, said he would like to have the recommendations in time for a possible special session on PEIA later this year. The December deadline in the executive order would likely preclude a special session just weeks before the start of the 2019 legislative session.

“It’s a lot easier to have a special session laser-beam focused on something like this,” Blair said.

“If we could have a report to the public ready by the first of the summer, that would be fine to me,” Hall responded.

Hall said the April meeting of the task force will include a presentation by PEIA executive director Ted Cheatham to provide a thorough overview of PEIA, including details on what is driving medical and pharmaceutical cost increases, and unique aspects of the plan, such as its sliding premium scale based on income.

Hall noted that the PEIA Finance Board’s plan to change premiums for family and employee and spouse coverage to a formula based on total household income was one of the key factors spurring outrage among teachers that ultimately contributed to the nine-day walkout.

That plan would have increased costs and cut benefits to insurees by $29 million for the 2018-19 plan year, primarily through significantly higher premiums under the total household income calculation.

In order to help end the walkout, Justice and the Legislature agreed to “freeze” premiums and benefits at current levels by putting funding into the 2018-19 state budget.

Hall, however, said he would be reluctant to change the sliding premium scale.

“It’s in the law. That was decided years ago as a strategy to help lower paid teachers and state employees to be able to afford insurance,” he said.

He noted that the state pays some $600 million a year to cover employers’ share of PEIA premiums, an amount roughly equal to half of all state sales tax collections.

“There may not be a single revenue source that you can apply to this that will pay for it all,” Hall said of ways to increase funding to PEIA.

Hall said the task force will look at all possible sources for increased funding, responding to a question from Judy Hale, a former American Federation of Teachers/West Virginia president representing retired teachers on the panel.

Hale said she would like the task force to look at revenue from gambling venues, from natural gas production and any other “pots of money…that could be a source for a direct revenue stream.”

For five consecutive years, the PEIA Finance Board opted to spend down reserve funds to avoid premium increases or benefit cuts.

However, once that fund was essentially exhausted, the board has had to propose a series of premium increases and benefits cuts totaling $120 million in 2016-17, $50 million in 2017-18, and the $29 million of “frozen” cuts for the upcoming 2018-19 plan year.

Tuesday’s meeting was in a crowded governor’s conference room, a venue selected before Justice added six women to the task force, responding to criticism that the 23 original appointees included only two women.

Hall said April’s meeting will move to the larger confines of the state Culture Center.

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