Earlier this month, when lawmakers have been nonetheless making ready to come back to Charleston for the legislative session, WVU Drugs Wheeling Hospital dropped a bombshell: it will cease taking the state’s public workers’ medical health insurance. Virtually instantly, lawmakers promised motion and on the primary day of the session, state senators handed a invoice to extend the quantity the Public Staff Insurance coverage Company, or PEIA, reimburses hospitals.
However even the invoice’s lead sponsor, Senate Majority Whip Ryan Weld, R-Brooke, acknowledged that the invoice was “a short-term repair to what are vital, systemic points inside PEIA.”
Greater than 200,000 public workers in West Virginia, together with all state workers and public faculty academics, depend on PEIA for well being look after them and their households. Frustrations over this system’s rising premiums and declining high quality of care have been a driving issue for the nine-day academics’ strike in 2018. However since then, the company’s monetary disaster has solely gotten worse.
This yr, lawmakers say they’re ready to behave to shore up this system, past the elevated reimbursement charges. However at this early level of the session, one potential PEIA reform that has lengthy been requested by advocates is noticeably absent from early legislative discussions: elevated everlasting funding.
Whereas advocates argue that with the company at the moment in a deficit and a large shortfall looming, legislators have to work to stabilize this system financially, Republican management is countering that giving the company extra money gained’t repair the company’s quite a few crises. And thus far the start of the session means that those that need extra everlasting funding for PEIA would possibly depart upset.
‘We can not proceed to attempt to discover non permanent fixes’
Requests to extend funding for PEIA date again years. In 2019, a PEIA Job Pressure convened by Gov. Jim Justice after the academics’ strike issued a collection of suggestions for fixing the insurance coverage program, together with a name for state funding of their solutions.
However that advice, together with others proposed by the duty pressure, was by no means carried out. As an alternative, the one latest supply of further PEIA funding has been a $105 million stopgap proposed by Justice and accepted by legislators in 2019, which was then used to create the PEIA Wet Day fund.
Nonetheless, PEIA’s bills have continued to extend yearly amid a years-long freeze in premium will increase. The development is pushed largely by rises in medical inflation and the growing prices of prescribed drugs, and have helped push PEIA right into a $92 million deficit in 2022. And with the remainder of the 2019 wet day fund set to be drained by the top of 2024, well being care advocates argue that the state must get severe about growing PEIA’s funding quickly.
“What we see the state doing is attempting to get away with funding PEIA at a flat degree, seeing that they’ve a shortfall yr after yr, and attempting to fill it in with stopgap measures,” mentioned Kat Stoll, the coverage director for West Virginians for Reasonably priced Healthcare.
“We can not proceed to attempt to discover non permanent fixes and one-time allocations to handle PEIA funds shortfalls,” she added.
Nonetheless, one-time allocations proceed to be the popular technique of addressing the difficulty. Final week, throughout his annual State of State handle, Justice introduced an extra $100 million allocation for the PEIA Wet Day Fund, a transfer that may assist the company fill a few of the projected $200 million shortfall it’s going to have in 2025. However the cash may not go a lot additional than that.
A latest evaluation from the West Virginia Heart on Price range and Coverage famous that given the extent of the harm, PEIA premiums must rise greater than 50% to totally cowl the price of the $376 million shortfall that’s anticipated by 2027. And whereas the state’s present requirement that insurance coverage prices be paid at an 80/20 break up between employers and workers implies that the state must bear a lot of the monetary prices of these potential modifications, consultants argue that premium will increase could be dangerous to public workers at the moment coping with inflation and stagnant salaries.
This has fueled the argument that with West Virginia at the moment experiencing a funds surplus, the state ought to transfer to extend state funds appropriations for PEIA utilizing cash from the Common Fund. That course of would require the Legislature to alter state statute in order that as an alternative of the state protecting a most 80% % of PEIA insurance coverage prices, it will now cowl 80% at minimal, stopping workers from experiencing sudden spikes in premiums. An identical provision was included within the PEIA job pressure suggestions however was not adopted.
For legislators, the issue is that PEIA has ‘did not handle themselves’
Simply days into the 2023 session, actual plans on PEIA are nonetheless taking form, with extra laws anticipated to be launched within the coming weeks based on spokespeople for each the state Senate and the Home of Delegates. However early discussions recommend that whereas PEIA will probably be a key matter, the main focus is likely to be altering how the state’s worker well being care plans work somewhat than growing funding for the company.
“I don’t assume the Legislature needs to be managing a medical health insurance supplier. However we’ll step in after we are pressured to and we have now been pressured to,” Weld mentioned.
Weld argues that PEIA and Justice bear a lot of the blame for the company’s present crises and that years of inaction will pressure legislators to make modifications this session to tug the insurance coverage company again from the “the precipice of catastrophe.”
“PEIA is meant to be their very own self-perpetuating, sustaining income,” he mentioned. “However as a result of they’ve did not handle themselves straight they’ve misplaced that.”
Relatively than extra funding, Weld prompt that senators will possible have a look at different fixes to PEIA, together with potential modifications to advantages and potential will increase in premiums, an space that well being advocates have lengthy feared will make this system extra expensive and much less efficient for enrollees. And whereas he stopped wanting suggesting that PEIA be absolutely privatized, Weld did be aware that personal insurance coverage packages may supply a potential framework for a way PEIA may very well be adjusted.
In earlier years, legislative efforts to carry PEIA in step with the personal market — a few of which have already been reintroduced this yr — have did not move and have confronted heavy criticism from well being coverage advocates within the state.
For now, as lawmakers start their common session, advocates argue that the decision for extra PEIA funding must be heeded. “It’s time for us to take this severe,” Dale Lee, president of the West Virginia Schooling Affiliation, informed reporters final week. “It’s time for us to take a look at PEIA and what we will do for a long-term answer, not yr by yr.”