State PEIA raises premiums, shelves coverage changes

By Lawrence Messina
Associated Press Writer

December 04, 2008 10:24 pm

— CHARLESTON — The more than 200,000 people who get their health care from West Virginia’s Public Employees Insurance Agency can expect higher monthly premiums or out-of-pocket expenses after June 2009.
The program’s Finance Committee voted Thursday to approve rate changes to address rising costs.
But the committee shelved proposed benefit changes after fielding criticism from hundreds of enrollees who submitted comments or attended public hearings throughout the state last month.
Plan members also opposed the rate increases, which officials say are the first in three years.
The higher costs will vary with income and employment status. Tobacco-free active employees who earn $36,000 annually, for instance, will see monthly premiums rise $3 to $13. Tobacco use will trigger a higher rate.
Tobacco-free retirees who also rely on Medicare won’t see premium increases, but their out-of-pocket maximum will go from $500 to $750.
Officials estimate the premium increases will average 9 percent for current state employees, 11 percent for non-Medicare retirees and 12 percent for those enrolled through non-state agencies. The increases take effect when the next budget year begins July 1, 2009.
Premium increase opponents include committee member Elaine Harris, a union official who represents enrollees. She unsuccessfully sought to have the board consider tapping a $363 million reserve for future program costs before raising rates.
Harris also cited the economic recession and the chance of health care changes once President-elect Barack Obama takes office next year.
“There are a lot of people in dire straits right now,” Harris said after Thursday’s meeting.
Program officials opposed that move. Recently adopted accounting standards require the state to calculate and then set aside the amount it has promised employees in future non-pension benefits. The $363 million reflects but a fraction of these “other post-employment benefits.”
“To spend this reserve would simply increase the unfunded OPEB liability, further increasing costs in the future,” program officials said in a statement.