(Reporter's Notebook by Steven Allen Adams - Photo Illustration - MetroCreativeConnection)

Last week marked the first legislative interim meetings since the end of June, with lawmakers getting a two-month summer break.

Well, some lawmakers. Much of Republican legislative leadership spent their summer in planning meetings for a possible special session that did not happen. At one point, there was a hard date set for a special session in July. But then that was moved back to September coinciding with last week’s interims.

It should be obvious that a special session — which was to be focused on the Public Employees Insurance Agency (PEIA) — did not occur. While discussion continues between Gov. Patrick Morrisey and legislative leadership, a special session probably will not occur for PEIA this year unless it happens during October interims.

“We continue to have very good conversations with the Legislature,” Morrisey said during a press conference last Monday. “We’ve always said that we want to be able to collaborate with the Legislature to get to a good place. I’m very encouraged by the discussions we’re having, and I’m still very hopeful we’re going to be able to get something done.”

But opportunities to have special sessions after October become less likely. November interims are at Pipestem State Park. And once you get to December interims, you might as well wait until January and the regular 60-day session.

I’m going to say something that will probably garner some pushback. But based on what I reported back in July regarding PEIA’s fiscal year 2025 report, what WV MetroNews Statewide Correspondent Brad McElhinny reported from a PEIA Finance Board meeting two weeks ago, and the report released Tuesday by BDO USA on PEIA commissioned by the Legislature, I’m not sure there is anything specifically wrong with PEIA.

According to a report released in July by Continuing Care Actuaries, it estimated that PEIA’s financial plan covering fiscal years 2025 and 2026 and going into 2027, 2028 and 2029 is projected to generate enough revenues — with the help of available surpluses — to meet projected insurance and administrative costs.

However, those projections were contingent on revenue increases from employer and employee premium increases, with future legislative appropriations required in order to deal with the growing costs — faced by public and private health care plans alike — of medical inflation and prescription drug costs.

McElhinny reported on Sept. 4 that the PEIA Finance Board received a briefing that PEIA’s internal finances were stable other than, again, preparing for increased costs in medical inflation and prescription drugs.

And according to the BDO report, PEIA’s total expenses have grown at a three-year compound annual growth rate (CAGR) of 8%, a figure that one BDO consultant said was consistent with the national health insurance industry’s claims growth.

Last year, the PEIA Finance Board approved premium increases for state employees beginning July 1 of 14%, a 16% increase for local government employees and a 12% increase for retirees — an increase of approximately $113 million. The Finance Board also approved an increase of 40% in out-of-pocket maximums for state and local government employees, as well as increases in co-pays. Administration fees for state and local fund employers will also increase by $2.50.

But those premium increases were largely due to former governor Jim Justice freezing PEIA premiums for five years. During that same time period, Justice and the Legislature approved 5% pay raises for state employees.

With some health care providers threatening to pull out of PEIA, the Legislature passed Senate Bill 268 in 2023, which returned PEIA to an 80/20 employer-employee match for state employees beginning in fiscal year 2025. SB 268 also set the reimbursement rate for all health care providers at a minimum level of 110% of what Medicare reimburses, something the BDO report credits for improving a decline of participation by health care providers.

But as a result, premiums were always going to spike and now, even with back-to-back-to-back pay raises, the premium increases in some cases resulted in less take-home pay for many public employees. The only bright spot in the BDO report is future premium increases will not be nearly as drastic. And the governor’s six-year budget forecast contemplates future pay increases for state workers.

Part of the BDO report involves laying out dozens of options for cost savings for PEIA. BDO put its top recommendation in a short-list. But several of the report’s top recommendations are likely non-starters among Republican lawmakers, especially heading into the 2026 midterm election cycle.

For example, removing non-state employee PEIA memberships — city and county governmental employees — from PEIA is unlikely, especially in the House, where members are most likely to hear from city and county officials and employees. And with a savings of $1 million, why take on that hassle?

Also, proposals to disenroll those using the spousal surcharge, which jumped from $147 during the previous plan year to $350 for the current plan year, and switching from basing PEIA tiers on an employee’s salary alone to basing it on total family income are also unlikely to gain much traction.

And despite claims by the Democratic lawmakers that the BDO report recommends the privatization of PEA, it actually appears to recommend the opposite. In fact, the source of that appears to be from stakeholder interviews, not from any BDO analysis. It was not part of BDO’s nine recommended opportunities or six items BDO encouraged the Legislature to pursue “opportunistically.”

“Shuttering of the PEIA in its current form and finding coverage in the private market, would increase members’ cost by 12%,” according to the report.

Fact is, I wouldn’t expect the Legislature to do much with PEIA beyond small items that can save money here and there. Things like focusing on fraud reduction, incentives for employees to use wellness programs to improve health outcomes, addressing the use of expensive specialty drugs (Ozempic, Wegovy, etc.), and drug importation programs.

PEIA still remains a far better health care benefit than most private health insurance plans, making it a great recruitment tool for new state employees, especially while pay lags behind. Lawmakers and Gov. Morrisey need to tread lightly.

Steven Allen Adams can be reached at sadams@newsandsentinel.com.