With some relatively minor adjustments, the finance board for the Public Employees Insurance Agency has given the green light to substantial cost hikes for workers and retirees. This decision has set off a chain of events that will likely have far-reaching consequences.

Unraveling the Financial Implications for Public Employees

Board's Initial Proposals and Their Rejection

Board members initially considered collapsing salary tiers in the wage-based insurance plan from 10 to five. However, they ultimately decided against this proposal. This move was significant as it would have had a direct impact on the financial structure of the insurance plan. Additionally, the original proposal included a lower financial assistance package for some retirees. But the board on Thursday chose to maintain the current assistance rates intact. Despite these rejections, the premium increases that retirees were expecting would still go into effect.This shows that while the board made some decisions to preserve certain aspects of the plan, the overall cost increases are now set in motion for the coming fiscal year.

Cost Increases for Different Groups

Public employees in the state's plan could face premium increases of 14% for the state fund or 16% in local government plans next year. Retirees, on the other hand, would face a 12% premium increase. The agency is also proposing significant increases in deductibles, with an average increase of more than $300, which is a 40% hike. Moreover, there are additional proposed cost increases for people with the insurance, such as a bump in the surcharge for spouses from $147 to $350. These increases also include higher copays for inpatient services, outpatient care, therapy, pharmaceuticals, and emergency room treatment.These cost pressures have emerged after legislation was passed mandating a snap-back to an 80-20 cost split between the government employer and insured employees. This change was in response to complaints from healthcare providers about the traditionally low reimbursement rate.

Public Employee and Retiree Reactions

Dale Lee, President of the West Virginia Education Association, expressed appreciation for the opportunity to speak out at public hearings last month. He hopes that legislative changes could soften the blow for workers and lead to another round of public hearings next spring. He believes that legislative action is needed to inject additional funds into the plan and modify the hard, fast 80-20 language.Kristie Skidmore, President of the American Federation of Teachers-West Virginia, stated that the Finance Board had few options and that the solution now lies with state lawmakers. She called on all education and public employees to contact legislators during the December 8-10 interim session and ask them to prioritize stabilizing PEIA and providing affordable healthcare.

Political Landscape and Future Outlook

West Virginia's political leaders are in a state of flux, with a new governor set to take office early next year and the Senate ready to change presidents. While there is some political uncertainty, Dale Lee remains optimistic and believes that the elected officials will take a long, hard look at the situation and find ways to alleviate the burden on public employees.Gov. Jim Justice's administration has dealt with similar issues in the past, such as pumping millions of dollars into a PEIA Rainy Day Fund to suppress cost increases. But now, with the new legislative landscape and the increased cost of insurance, finding a long-term fix becomes even more challenging.Justice acknowledges the difficulty of getting the Legislature to agree to a long-term solution but remains committed to working on it. He believes that going forward, it will require a collective effort to address the issue and provide relief to public employees.