HelpCenter 

PEIA board OKs $120M health plan cuts

You are here

PEIA board OKs $120M health plan cuts
The Associated Press

As a state budget standoff drags on, West Virginia is again teeing up larger cuts to health plans that would hike premiums and copays for about 230,000 state employees, teachers and retirees.

West Virginia's Public Employee Insurance Agency Finance Board on Wednesday approved $120 million in cuts from health plans. The board also passed a backup plan, should more money come its way in the state budget process.

The planned cuts were first passed in December, but the board largely shelved the idea after Democratic Gov. Earl Ray Tomblin proposed refueling the health plans with higher taxes on tobacco products and e-cigarettes.

That idea died in the Republican-led Legislature, drawing a clear political divide on tax hikes, bigger spending cuts and use of reserves that has kept West Virginia at a budget impasse. Usually, the budget is passed in mid-March. The new fiscal year starts July 1.

However, employees and retirees are signing up for their health insurance almost immediately - open enrollment runs from Saturday through May 15. They'll be picking from options that reflect the bigger cuts. Changes would need to be made if lawmakers and the governor agree on a budget that backfills the plans.

The cuts would affect the 2017 fiscal year beginning in July. PEIA Director Ted Cheatham said that if a new plan is put in place after June 1, claim payments could be temporarily delayed starting in July while the new systems are set up.

Tomblin said Wednesday that he thinks the budget can pass before then.

"It's obvious that the powers that be think state employees have a job and they should be happy with that, with its low pay and now its not-so-great benefits," PEIA board member Mike Smith said Wednesday, fighting back tears.

Republican legislative leaders have said the Tomblin administration is using the health plan funding as a "political football," adding that GOP-passed budgets included funding for the health plans.

"We maintain our belief that the additional meeting and action of the PEIA board is unnecessary, and we fully anticipate passing a final budget that will ensure our PEIA participants do not face these inflated copays and deductibles," said House Speaker Tim Armstead, R-Kanawha.

Lawmakers and the Tomblin administration have been meeting on the budget without reports of any specific agreements.

West Virginia faced a $466 million budget gap for next year because of the decline of the coal industry and drops in natural gas prices. About two weeks ago, the administration estimated that the state would be down another $92 million in revenues.

Lawmakers have to bridge about $238 million in remaining areas of disagreement to make the budget balance, as required.

The House budget would use $32 million from Rainy Day Fund reserves, $17 million in extra cuts and $72 million from agency accounts.

Senators proposed $115 million through higher tobacco taxes and $20 million by eliminating greyhound racing subsidies not approved by the House.

Tomblin has opposed using reserves.