Commentary: PEIA predicament brings pressure on lawmakers, governor
By Hoppy Kercheval
One of the critical pressure points in the ongoing discussions between the Tomblin administration and legislative leaders over a budget for next fiscal year is funding for the Public Employees Insurance Agency. PEIA is the state’s health insurance program for 220,000 public employees and retirees.
Last year, the PEIA finance board proposed a series of controversial changes to cut $120 million in costs. State workers and retirees flooded public hearings to complain about higher premiums for retirees, as well as higher deductibles, out-of-pocket maximums and increased prescription costs for public employees.
Governor Tomblin responded in January with a proposed .45 cent-a-pack increase in the cigarette tax and other measures to restore most of the cuts. However, that fix was dependent upon the legislature approving his budget.
The Senate went along with the plan, and even upped the cigarette tax to $1, but the more conservative House of Delegates rejected the increase, choosing instead to balance the budget by cutting spending and borrowing from the Rainy Day Fund.
Republican leaders say they were prepared to adopt the House budget, which included making the PEIA whole. However, all the proposed budgets for FY 2017 were rendered moot when the Tomblin administration last week announced the hole in next year’s General Revenue budget would be closer to $240 million, $92 million more than expected.
Since then, budget conferees have made little progress on a new budget, which brings us back to the PEIA predicament.
The PEIA plan year begins July 1st, but the annual enrollment period begins April 2nd and the agency must have its plan choices and associated costs in place by then. Those deadlines have prompted the PEIA finance board to schedule a special meeting for Wednesday to plan for the way forward.
One option would be for the finance board to simply revert back to the original plan from last fall and cut benefits by $120 million. If that happens, thousands of public employees and retirees will go through the roof, especially since Governor Tomblin and legislative leaders have promised a fix.
Then the issue becomes, who gets the blame?
The Tomblin administration has tried to get a jump on the issue. Communications director Chris Stadelman issued a statement saying the Governor’s fix for PEIA was structurally sound. He shifted the blame to the House. “The House of Delegates did not pass those revenue increases, and without a FY 2017 budget there is no guarantee of additional funds for the program.”
However, House Speaker Tim Armstead and Senate President Bill Cole issued a joint statement in response. Armstead said the meeting was an “unnecessary step” because “The House and Senate leadership have repeatedly committed to fully funding our state employees’ health insurance program for the coming year.”
Senate President Bill Cole charged that PEIA is “once again being used as a political football for the sole purpose of gaining leverage in the budget process.”
Theoretically, lawmakers and the Governor have until June 30th to adopt a new budget, but the PEIA predicament, and the potential for recriminations, will likely give all involved greater impetus to finish the job well ahead of that, making sure that the PEIA hole is filled.