PEIA reform bill on its way to W.Va. Senate floor
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CHARLESTON -- A bill proposing multiple changes to the program that provides healthcare coverage for West Virginia's public employees is on its way to the full state Senate for consideration, but one union leader accused lawmakers of operating behind closed doors.
The Senate Finance Committee moved quickly Tuesday afternoon to recommend Senate Bill 268, relating to the Public Employees Insurance Agency, to the full Senate after a Senate Finance subcommittee finished work on a committee substitute for the bill.
The bill addresses numerous issues facing PEIA, including hospital reimbursement issues and future potential insolvency of the program that insures more than 230,000 state employees, local government employees, and retirees. But the committee asked no questions of counsel and sought no testimony from PEIA or interested parties.
Josh Sword, president of the AFL-CIO, was in the audience for Tuesday's Senate Finance Committee. A former member of the PEIA Finance Board, Sword complained about the speed of the bill and the lack of public discussion among lawmakers.
"I've been lobbying for 25 years and I've never seen a 55-page bill that impacts 230,000 West Virginians be dispensed with so quickly in the Finance Committee," Sword said.
The committee substitute to the Senate Health and Human Resources Committee's substitute for SB 268 sets the reimbursement rate for all healthcare providers at a minimum level of 110% of what Medicare reimburses providers, including setting rates for hospitals for Medicare diagnosis groups covered by state and non-state plans, or the Medicare per diem per day rate applicable to critical access hospitals. It also exempts retiree health plans from rate setting.
The bill requires that all members of the PEIA Finance Board shall have a fiduciary responsibility to protect plan assets for the benefit of plan participants. All board members are required to complete fiduciary training and fill out conflict-of-interest forms in order to serve as fiduciaries.
The bill requires the director of PEIA to provide the number of those covered for the current fiscal year and a five-year analysis of the costs for covering paid claims to the PEIA Finance Board no later than Oct. 15 in the prior fiscal year. The bill requires the PEIA Finance Board base their opinion on the cost share of 80% employer match and 20% employee match. PEIA is required to use a nationally accredited network for out-of-state care.
SB 268 cracks down on spouses of PEIA participants who have access to health insurance but choose to join their spouses' PEIA plan. The bill would change the price of the plan for spouses of PEIA plan participants who have access to health insurance coverage to the actuarial value of the PEIA plan, though this does not apply to spouses covered in the voluntary employer plan.
SB 268 requires PEIA to return to an 80/20 match during the 2023 fiscal year. PEIA would charge an administrative fee on all state employers beginning July 1. The bill requires an actuarial study of the financial solvency of the plan, with any plan changes being applied to plan year 2023-2024.
According to the most recent fiscal note available from PEIA, the bill would cost $27.7 million when fully implemented. If the state returns to and 80/20 match beginning in July, premiums would increase by 14% for employees and 12% employers assuming the plan receives $74 million in non-premium revenue. If the revenue is not received, premiums would increase by 26% for employees and 25% for employers after July.
Sword said there are still many unanswered questions about the effects of SB 268 on public employees and their families.
"If we're going to be at 80/20 by July 1st, what does that mean for plan participants? If you're a retiree, what does this bill do? If you're a police officer or firefighter who works for a city and a county that opts in to PEIA, how will this bill impact their ability to access PEIA? If you're a spouse or a dependent of a covered employee, how does this bill impact you," Sword said.
"Lots of questions should have been asked," Sword continued. "To be quite honest with you, I'm sure questions were had among senators about this legislation, but those conversations did not take place in public."
According to a PEIA five-year forecast, medical costs are expected to increase by 7% by fiscal year 2027 with prescription drug costs expected to jump by 14%. PEIA's own forecasts show that by fiscal year 2027, the program will face a $376.5 million hole unless the state puts more money into PEIA or premiums increase.
The state put $105 million into a PEIA Rainy Day fund in 2019, and has already taken $31 million to cover a $93 million shortfall at the end of fiscal year 2022 in June. The program will need another $74 million from the reserve fund by the end of this fiscal year, leaving a $40 million shortfall.