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Vote on PEIA cuts postponed

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Vote on PEIA cuts postponed
By Phil Kabler, The Charleston Gazette-Mail

A vote to cut health insurance benefits for more than 200,000 public employees and retirees by more than $120 million next year was postponed Thursday — not by a last-minute reprieve, but by a clerical error.

Members of the Public Employees Insurance Agency Finance Board were poised to proceed with approval of what PEIA Executive Director Ted Cheatham has called draconian cuts, but postponed the vote after they learned that notice of the meeting had not been published in the State Register, as required under state Open Meetings law.

Board members adjourned the meeting to 2 p.m. next Thursday, but Cheatham suggested that will only postpone the inevitable.

“We still have a $120 million deficit that has to be handled,” he said. “I don’t think we have any choice. The board’s hands are tied.”

With no additional state funding provided to offset increasing health care costs, and having spent down PEIA’s reserve fund over recent years, Cheatham said the Finance Board has no options but to cut benefits. The only proposal under consideration calls for steep increases in co-pays, deductibles and out-of-pocket maximums for medical care, along with major increases in prescription drug costs.

Acting Administration Secretary Jason Pizatella, who serves as chairman of the Finance Board, said discussions at the Capitol are ongoing to find more state funding to lessen the impact of the cuts.

“The governor’s office and Legislature are certainly talking about what they can do,” he said, saying he expects the discussions to continue into the 2016 legislative session.

During the meeting, the heads of the state’s teachers unions called on public school and public employees to band together to demand that the governor and Legislature provide additional funding for PEIA benefits.

“I believe all state workers are going to unite to go to the governor and Legislature, and say this is unacceptable,” West Virginia Education Association President Dale Lee told the board. “Be part of the voice that says the state has to put more money into this.”

AFT-West Virginia President Christine Campbell said she was disappointed the initial response of legislative leadership to the PEIA funding crisis has been “to point fingers and play the exhausting blame game.”

“I’m also frustrated by comments from leading representatives that the taxpayers of West Virginia can’t afford any tax increases,” she said. “PEIA participants are West Virginia taxpayers, and we can’t afford outrageous increases in our deductibles, prescriptions and out-of-pocket expenses.”

Both said shifting health care costs to public employees amounts to a devastating pay cut, which Lee said will be another blow to public education in the state.

“We’re hurting our children,” he said. “We’re driving more and more of our teachers out of the system and out of the state.”

According to PEIA, for active employees, the increase in deductibles by $500 for single coverage and $1,000 for families is a $30 million cost shift. Increasing out-of-pocket maximums by $1,500 for single and $3,000 for family coverage shifts another $16 million of costs to insurees.

Changes in prescription drug benefits — the most severe being changing the co-pay for preferred brand name drugs from $35 to 30 percent of the drug’s total cost — will cost insurees about $17.1 million.

For retirees, changes in prescription drug benefits will increase costs by about $15.4 million, while an 8 percent premium increase will add $6.9 million in costs.

For retirees, the proposed benefits cuts will go into effect on Jan. 1, 2017, while cuts for active employees will begin July 1, 2017.

As for the failure to publish the meeting notice, Cheatham said it was all a clerical error in filing the notice electronically with the secretary of state’s website. In posting the notice, he said, the year counter somehow got set for 2014.

Indeed, a search of the State Register shows the notice of Thursday’s meeting duly posted — under the December 2014 meetings list.