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Justice: No Change in State Funding for PEIA Next Year

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BY: Phil Kabler, Charleston Gazette-Mail

Gov. Jim Justice has notified Public Employees Insurance Agency Executive Director Ted Cheatham that state funding for PEIA for the 2019-20 plan year will total $575 million — an amount unchanged from the current plan.

By law, the governor must provide what is known as the guidance letter to PEIA by Oct. 15 of each year, so that the PEIA Finance Board can devise the next year’s benefits plan, a proposal that goes out to public hearings in November and early December, and is formally approved by the board in mid-December.

In the letter, Justice said the state will provide $386 million from general revenue and $189 million from special revenue to fund PEIA, a health insurance plan that covers more than 230,000 West Virginians. The amount essentially covers employer contributions to the plan.

“This represents the same amount of state funds estimated to have been available for fiscal year 2019,” Justice wrote.

The letter makes no mention of Justice’s pledge announced Oct. 2 to commit an additional $100 million to PEIA.

In a statement Wednesday, Mike Hall, Justice’s chief of staff and chairman of the PEIA Task Force created by the governor in February to find a fix for PEIA funding and benefits issues, explained why the $100 million is not included in the guidance letter:

“Gov. Justice has proposed the additional $100 million appropriation for PEIA, but it must be approved by the Legislature. Additionally, the intent is that this money will be used to create a PEIA stability fund separate from general funding.”

In announcing the $100 million commitment, Justice said, “Today, we are announcing that we’re going to dedicate $100 million today — $100 million — to a long-term solution of fixing PEIA and stabilizing it in the future.”

Delegate Mick Bates, D-Raleigh, who also serves on the PEIA Task Force, said Wednesday that he was disappointed the $100 million pledge was not included in the guidance letter.

“What you’ve got is people telling us one thing and doing something else, which I think people are tired of,” Bates said.

He said that is indicative of an administration that has kept the PEIA Task Force on hiatus for two months. It last met on Aug. 24.

“The Task Force has become a task farce,” Bates said. “It’s clear, nothing is going to get done before the election — and that’s by design.”

On Wednesday, the Task Force did announce that its Coverage and Plan Subcommittee will meet Oct. 29, ending a 66-day stretch with no meetings. That is eight days before Election Day.

“It’s incredibly frustrating that we’re fundamentally at the same place we were at when we left at the end of the regular session,” Bates said of the lack of progress from the Task Force.

Justice created the 29-member panel by executive order on Feb. 28, at the height of the statewide teacher strike, where a key issue was finding “a fix, not a freeze” to resolve ongoing PEIA premium increases and benefit cuts.

At the Task Force’s first meeting, on March 13, Justice told the panel, “I’m wanting you to find a solution, and not wanting it to take forever.”

Since then, however, Justice has said on numerous occasions that he is working independently on a PEIA solution, possibly including privatizing the plan, which covers state and many local government employees, including public school teachers, administrators and school service personnel.

Although the Task Force has an official deadline of the end of December legislative interim meetings on Dec. 11 to submit recommendations to the Legislature, many panelists initially called for completing the report by September or October, so that PEIA Finance Board members could incorporate the recommendations into the 2019-20 plan design.

On Sept. 27, Senate Finance Chairman Craig Blair, R-Berkeley and a member of the Task Force, sent a letter to Justice raising concern over what was then a month-long hiatus.

Also in September, the PEIA Finance Board learned that, because of unexpectedly low claims costs and unexpectedly strong investment earnings in the 2017-18 plan year, which ended June 30, PEIA will have sufficient surplus revenue to keep premiums and benefits unchanged for the 2019-20 plan year.

Bates, however, said he believes claims costs are down because high co-pays and deductibles are forcing many PEIA insurees to forego medical care and prescription drugs.