Brian Cunningham, director of the Public Employees Insurance Corporation, offered lawmakers three options that could help limit future premium increases and out-of-pocket expenses for public employees and retirees. (Photo courtesy of WV Legislative Photography)

CHARLESTON — While the West Virginia Public Employees Insurance Agency Finance Board is on track to hold public hearings to get feedback from state government employees, local government employees and retirees on proposed premium increases, lawmakers are considering changes to help offset rising costs.

The Joint Standing Committee on Insurance and PEIA met at the State Capitol Monday morning on the second day of November’s interim legislative session.

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

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

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

State Sen. Ben Queen, R-Harrison, looks at PEIA’s five-year financial plan during the interim legislative session. (Photo courtesy of WV Legislative Photography)

During his presentation Monday, Cunningham offered lawmakers three public policy ideas that could help address and limit future premium increases and out-of-pocket expenses. One way is for lawmakers to clear up confusion on the 2023 bill that would reform PEIA.

Senate Bill 268 returns PEIA to an 80/20 employer-employee match for state employees starting in July; For non-contiguous out-of-state counties, the employee/employer match for out-of-state medical care will be 70/30 .

Among other reforms, SB 268 set the reimbursement rate for all health care providers at a minimum of 110% of the amount Medicare pays providers. Cunningham said the mandate should be changed to cover only hospitals, not all health care providers.

“I wasn’t here when Senate Bill 268 was passed, but I understand that Senate Bill 268 was intended to target reimbursement for inpatient hospitals.” Cunningham said. “It was interpreted by predecessors at PEIA to include all healthcare providers. What we want to consider in PEIA is to not pay 110% to all healthcare providers. “What we actually see in PEIA is that we are overpaying for some services compared to national averages.”

Cunningham also told lawmakers they might consider imposing limits. “gold card” Prescribers refer to doctors who are allowed to approve prescriptions for PEIA patients without prior authorization.

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

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

“There’s a reason why we (have prior authorization) on things like GLP-1s.” Cunningham said. “If a gold card provider can write a prescription for Ozempic with a PA, then PEIA has no way of checking that these drugs are dispensed only to people diagnosed with type II diabetes.”

State Senate Majority Leader Tom Takubo, R-Kanawha, is a pulmonologist at WVU Medicine. He said lawmakers should be careful about future changes to reimbursement for health care providers.

“I want to be careful that we don’t back out of something where everyone will lose their services, then everyone will be on our doorstep.” Takubo cited strikes in 2018 and 2019 over overpayment of teachers and school service personnel and PEIA benefits.

“We turn every stone upside down; “I’m literally turning over the couch cushions at PEIA to find the change,” Cunningham said.

“I know you guys are watching carefully. I’m just looking ahead for any unintended consequences.” Takubo said. “We can do things with great intention and then realize we are harming something else.”

One of the biggest issues that increase PEIA costs is the rate of inflation and the use of prescription drugs. According to PEIA reports, total prescription net plan costs totaled $256.5 million in fiscal year 2024 from July 2023 through June 2024; this was up 16.6% from $220.1 million in fiscal 2023. The cost is expected to increase in fiscal 2026.

“We cannot continue to see a 21 percent inflation trend in prescription drugs.” Cunningham said. “If this happens, there will be massive premium increases and changes to benefits on an ongoing basis. We have to bend the curve; We need to reduce the trend. We must control prescription drug expenditures.”

One way to improve PEIA’s ability to negotiate lower prices with pharmacy benefit management companies is through more members. PEIA has a total of more than 155,000 active members and 56,000 retirees, a decrease of between 10,000 and 15,000 in the last few plan years, Cunningham said. Cunningham suggested opening the pool, which is not open to the public, to additional county and city public employees with guardrails.

“At a high level, the more members PEIA has, the better deals we get with vendors.” Cunningham said. “Unfortunately, PEIA has been shrinking over the last few fiscal years… My purpose in proposing that we reopen the out-of-state pool is to allow anyone who wants to join PEIA, a local organization, to do so, but with some. “There are really tight guardrails about who is allowed to participate.”

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

Rohrbach said he is concerned about reopening the pool, which is not open to the public, and upsetting health care providers who may lose money as some local government employees switch to PEIA. A moratorium on allowing additional local governments to participate in PEIA was implemented in 2021.

“If these people come in at a greatly reduced fee schedule, it will hurt local providers in local communities.” said Rohrbach. “Someone is going to pay for this, right?

“There was a lot of pressure on this legislature when we had the moratorium around these concerns.” Rohrbach continued. “When you look at this, we are going to have to take this very seriously. “No matter what we do or don’t do, we will need to work with the provider community.”

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

Steven Allen Adams can be reached at [email protected].