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PEIA urges Legislature to provide more funding as cuts are approved

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PEIA urges Legislature to provide more funding as cuts are approved
By Eric Eyre, The Charleston Gazette-Mail
    
More than 200,000 public employees and retirees in West Virginia will see “draconian” cuts to their health insurance benefits next year — unless state lawmakers decide to fully fund the program during the upcoming legislative session.

Members of the state’s Public Employees Insurance Agency Finance Board voted unanimously Thursday to approve $120 million in cuts to workers’ health plans.

The expected fallout: Steep increases in co-pays, deductibles and out-of-pocket maximums for medical care, as well as major increases in prescription drug costs.

“This is going to be very devastating,” said Elaine Harris, a PEIA board member. “People are going to have to make choices, and those choices are not good choices.”

Board members said they’ve run out of options for keeping employees’ current benefits. There’s been no additional state funding to offset rising health care costs, and PEIA has exhausted its reserve fund in recent years.

“There’s no more money to spend down,” Harris said.

In a separate vote Thursday, board members tried to shift the onus for the cuts to the state Legislature. The board said it would scrap all proposed health insurance benefit cuts for public employees and retirees, if legislators allocate the $120 million needed to keep workers’ benefits the same.

“The board is sending a clear message to the Legislature,” said Josh Sword, a PEIA board member. “If you — legislative leadership — make funding PEIA a priority, then this is the difference you can make. If you choose not to, then we’re looking at draconian benefit reductions.”

The state’s teachers unions have asked public workers and school employees to join forces and demand that the Legislature and governor find a way to provide additional funding for PEIA benefits.

“What this plan does is a pay cut to those hardworking individuals who can least afford it,” said Dale Lee, president of the West Virginia Education Association. “The people who work hard are taking this as just another slap in the face.”

Union leaders told board members that the PEIA cuts have become a distraction for teachers. The cuts will make it even more difficult for schools to recruit teachers in West Virginia, said Christine Campbell, president of the American Federation of Teachers — West Virginia.

“We are facing $120 million in benefit cuts,” Campbell said. “It’s putting a stress on everyone right now.”

PEIA’s Finance Board also voted Thursday to urge state lawmakers to support legislation that would raise the state’s tobacco tax, with 100 percent of the additional revenue earmarked to stave off the PEIA cuts. Increasing the state’s cigarette tax would raise $112 million extra a year. Additional taxes on smokeless tobacco and electronic cigarettes would provide enough money to reach the $120 million needed to keep existing benefits intact.

“Obviously, the plan needs additional monies,” said Perry Bryant, a former PEIA board member and health care policy expert who supports a tobacco tax increase.

Last month, state Senate President Bill Cole, R-Mercer, said he opposed tax increases to fund state employees’ PEIA coverage.

Under the cuts, for active employees, an increase in deductibles by $500 for single coverage and $1,000 for families is a $30 million cost shift, according to PEIA. 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.

“People are angry and rightfully so,” Sword said.