Brian Cunningham, director of the Public Employees Insurance Agency, offered lawmakers three options that could help limit future increases in premiums and out-of-pocket costs for public workers and retirees. (Photo courtesy of WV Legislative Photography)

CHARLESTON — As the West Virginia Public Employees Insurance Agency’s Finance Board hits the road for public meetings, getting feedback from state government workers, local government workers and retirees on proposed premium increases, lawmakers are considering changes to help address rising costs.

The Standing Joint Committee on Insurance and PEIA met Monday morning at the state Capitol building for the second day of the November midterm legislative sessions.

Committee members heard a report from Brian Cunningham, director of the Public Employees Insurance Agency (PEIA). The PEIA Finance Board is considering changes to the PEIA and Pension Health Benefit Trust (RHBT) plans for fiscal year 2026, beginning July 1, 2025.

Under the current proposals, state employees could face a 14 percent premium increase to $27.3 million, or an average increase of $31.50 a month. County and city employees who participate in the local fund would see a 16 percent premium increase. Public employee retirees in the RHBT fund would see premium increases of 12%.

Other proposed increases include raising deductibles and out-of-pocket maximums to 40 percent, or an average increase of $355 for state employees and $310 for local government employees. The 40 percent deductible increase would also affect non-Medicare retirees. Increases in co-payments and monthly spousal surcharges are also on the table. The proposed increases would bring in $113 million in revenue for PEIA in fiscal year 2026.

State Sen. Ben Queen, R-Harrison, reviews PEIA’s five-year financial plan during a midterm legislative session. (Photo courtesy of WV Legislative Photography)

Cunningham presented three public policy ideas to lawmakers during his presentation Monday that could help address and limit future increases in premiums and out-of-pocket costs. One way is for lawmakers to address the confusion in a 2023 law reforming PEIA.

Senate Bill 268 returned PEIA to an 80/20 employer-employee match for state employees beginning in July, with the employee/employer match going to 70/30 for out-of-state health care for noncontiguous out-of-state counties . .

Among other reforms, SB 268 set the reimbursement rate for all health care providers at a minimum of 110 percent of what Medicare reimburses providers. Cunningham said this requirement should only be changed at hospitals and not at all health care providers.

“I wasn’t here when Senate Bill 268 was passed, but I understand that Senate Bill 268 was intended to address reimbursement for inpatient hospitals,” Cunningham said. “It was interpreted by the previous PEIA people to include all healthcare providers. What we would like to consider at PEIA is not paying 110% to all healthcare providers. In fact, what we see at PEIA is that we are overpaying compared to national averages for some services.”

Cunningham also told lawmakers he might consider imposing some limits “golden book” prescribers, i.e. doctors who are allowed to approve prescriptions for PEIA patients without prior authorisation.

“One of the things that has come up recently is an interpretation that any provider who has a gold card can write a prescription with a PA (prior authorization,” Cunningham said. “I think the Legislature has an opportunity to clarify that, because I don’t think that was the intent of the Legislature.”

Cunningham explained that gold card prescribers can sign off on expensive drugs, such as the popular injectable GLP-1 drugs (Ozempic, Wegovy, etc.) without having an approved diagnosis, such as type II diabetes. Doctors prescribe injectable GLP-1 for weight loss and not because of a specific diagnosis. According to PEIA, GLP-1 drugs cost $52.5 million or 19.9% ​​of total PEIA costs.

“We have (prior authorizations) for things like GLP-1 for a reason,” Cunningham said. “If a Gold Card provider can write a prescription for Ozempic … with a PA, then PEIA has no way to control that those drugs are only issued to people with a diagnosis of type II diabetes.”

State Senate Majority Leader Tom Takubo, R-Kanawha, is a pulmonologist at WVU Medicine. He said lawmakers need to be wary of any future changes to healthcare provider reimbursements.

“I just want to make sure we don’t pull something where everybody loses service, then everybody’s out our doors.” Takubo said, alluding to the 2018 and 2019 strikes by teachers and school service personnel who were overpaid and PEIA benefits.

“We turn over every stone; literally overturning the couch cushions at PEIA to find the loose change.” Cunningham said.

“I know you’re watching carefully. I see unintended consequences in the future,” Takubo said. “We can do things with great intention and then realize we’ve hurt something else.”

One of the biggest issues driving PEIA costs is the rate of inflation and prescription drug use. According to PEIA reports, total prescription plan costs were $256.5 million in FY 2024 between July 2023 and June 2024, a 16.6 percent increase from $220.1 million in FY 2023. The cost is expected to increase for fiscal year 2026.

“We cannot continue to see 21% inflationary trends in prescription drugs,” Cunningham said. “If that happens, there will be major premium increases and benefit changes going forward. We must bend the curve; we need to reduce the trend. We need to get prescription drug spending under control.”

One way to improve PEIA’s ability to negotiate with pharmaceutical benefit management companies for lower prices is more members. Cunningham said PEIA has more than 155,000 total active members and 56,000 retirees, down between 10,000 and 15,000 members in recent plan years. Cunningham proposed opening the non-public pool to additional county and city public employees with railings.

“At a high level, the more members PEIA has, the better deals we get with suppliers.” Cunningham said. “Unfortunately, PEIA has shrunk over the last two fiscal years… My intention in suggesting we reopen the non-state group is to allow anyone who wants to participate in PEIA, which is a local entity, to come in, but with some railings very tight for who is allowed to participate.”

House Vice Speaker Matthew Rohrbach, R-Cabell, is co-chairman of the Standing Joint Committee on Insurance and PEIA and a physician in Huntington. He was also a key supporter of SB 268 in 2023.

Rohrbach said he’s concerned about opening the non-public pool back-up and upsetting health care providers who could lose money from some local government workers switching to PEIA. A moratorium was instituted in 2021 to allow additional local governments to participate in the PEIA.

“If these people end up on a drastically reduced tax schedule, that’s going to hurt local providers in their local communities.” Rohrbach said. “Someone will pay, right?

“There was a lot of pressure put on this legislative body when we did that moratorium around these concerns,” Rohrbach continued. “The way you look at it, we’re going to have to take it very seriously. Whatever we do or don’t do, we’re going to have to work with the vendor community.”

The PEIA Board of Finance held its third public hearing on the proposed raises Tuesday at 5:30 p.m. at the Holiday Inn Martinsburg; and Thursday at 5:30 pm at the Highlands Event Center in Wheeling. Other meetings are scheduled for Morgantown at the Erickson Alumni Center on Tuesday, Nov. 19; and Charleston at the Cultural Center on Thursday, November 21. A virtual town hall is also scheduled for Monday, November 18. The PEIA Board of Finance will finalize a plan on Thursday, December 5 and vote to approve the final plan on Wednesday. January 1, 2025.

Steven Allen Adams can be reached at [email protected]