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PEIA task force pushes toward deadline for final recommendations

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By: Phil Kabler, Charleston Gazette-Mail

With a Dec. 11 deadline looming, a subcommittee of the governor’s PEIA task force adopted some key recommendations Tuesday, including a proposal to eliminate penalties for seeking medical care in out-of-state border counties.

However, the task force — created at the height of the statewide teacher walkout to find a long-term “fix” to ongoing problems with the state-run health insurance plan — is likely to leave major issues unresolved when it makes its final recommendations to the Legislature on Tuesday. That includes failing to meet a mandate to find a dedicated revenue source for PEIA to offset ever-increasing medical and pharmaceutical costs.

In a news conference later Tuesday, Gov. Jim Justice conceded that the task force will not come up with a dedicated revenue source, but said he is committed to fully funding PEIA.

“Our government is going to have to find a way to dedicate additional resources to PEIA,” said Justice, who previously announced plans to provide a $100 million funding supplement to PEIA in the 2019-20 state budget. “Our commitment to our teachers, our government workers, to PEIA is that we’re going to stand behind them,” he added.

The 29-member task force is planning a busy day next Monday as it pushes to adopt final recommendations for the Legislature ahead of its deadline. That will include the first meeting of its Cost and Revenue subcommittee since Aug. 23 in order to sign off on financial recommendations. Mike Hall, chief of staff to Justice and chairman of the task force, said Tuesday it would have been preferable to have that subcommittee meet more frequently throughout the year, but said Justice’s commitment to provide an additional $100 million of funding for PEIA in the 2019-20 state budget simplified their work.

“Just given the nature of the year it was, getting people together … we wanted to honor the fact the [sub]committee exists. With the governor’s recommendation, I would assume that would give them significant guidance on what to do.”

That likely means the task force will leave several issues unresolved, including finding a dedicated revenue source to address PEIA’s need for roughly an additional $50 million each year to cover increasing medical and pharmaceutical costs. For PEIA insurees, the revenue source most advocated in statewide public hearings was an increase in the state severance tax on natural gas — a proposal quickly shot down by legislative leadership.

On Tuesday, Justice questioned whether increasing the severance tax on natural gas could end up driving people and investment out of the state. “Then, all of a sudden, this dedicated revenue source has really hurt us,” he said.

Also left for future study is the plan’s tiered premium structure, in which premiums, copays and deductibles vary, based on employee income. PEIA Executive Director Ted Cheatham reminded subcommittee members that there have been multiple attempts in the past to shrink the 10-tier premium system to as few as three-to-five tiers — proposals that have ultimately failed because they would have raised premiums for the lowest-paid public employees.

“It’s a big lift,” he said of reforming the tiered premium structure. “I would love to see the task force helping us on it.”

On Tuesday, the Coverage and Plan subcommittee approved several recommendations to address concerns raised during 21 public hearings around the state, including eliminating penalties for those who leave the state to obtain medical services in border county locations such as Winchester, Virginia, or Marietta, Ohio.

In the past, in order to discourage PEIA insurees from going to out-of-state providers who charge higher rates than the discounts PEIA is able to negotiate with in-state hospitals and physicians, PEIA has charged 30 percent to 40 percent coinsurance rates for insurees who go out-of-state for medical care, as opposed to 20 percent for in-state care. That was an issue raised in public hearings, particularly for residents of the Eastern Panhandle, who were having to drive to Morgantown rather than nearby Winchester, Virginia, for most medical care.

Under the proposal adopted Tuesday, PEIA would charge the standard 80-20 rate for health care services in counties bordering West Virginia. The proposal also calls for waiving a $25 copay and facility fee limits for out-of-state services.

The subcommittee also approved a proposed appeals process for insurees who require Tier 3 non-preferred brand name prescription drugs, which carry a 75 percent coinsurance rate. If the appeal is upheld, those insurees would pay a $25-a-month copay rather than 75 percent of the total cost of the prescription drug.

Cheatham said the two benefits changes would increase PEIA’s costs by about $10.8 million in the 2019-20 plan year, and would increase the projected amount of additional state revenue needed to balance the 2020-21 plan to about $95 million.

Justice created the task force by executive order on Feb. 28, as part of a resolution to the nine-day statewide teacher walkout, with a mandate to find permanent solutions to issues with ongoing premium increases and benefits cuts to PEIA, a health insurance plan that covers more than 200,000 West Virginians, including teachers, school service personnel, and state employees and retirees.