Bluefield Daily Telegraph, Bluefield, WV

December 11, 2013

W.Va. PEIA to cut premiums by $10 in fiscal 2015

Associated Press

CHARLESTON — The Public Employees Insurance Agency will give state and public employees a break on health insurance premiums next year.

Beginning July 1, 2014, premiums will be reduced by $10. There will be no rate increases or benefit changes for retirees, PEIA director Ted Cheatham said.

Cheatham discussed PEIA’s finances Tuesday during an interim legislative meeting, the Charleston Daily Mail reported.

He said the premium reduction is due to the ending of a program that provided blood tests in the workplace. Employees who participated in the “Improve Your Score” program received a $10 premium reduction.

Cheatham told lawmakers that the program has “pretty much run its course” and blood test services will be shifted back to physicians’ offices. The agency is now partnering with Marshall University to provide workplace wellness programs on fitness, dieting and stress management.

He also said PEIA is well below its budget because of good investments. The active employees’ program is about $30 million ahead of projections, and the retiree program’s trust fund is about $80 million ahead.

“A big chunk of that are investment incomes,” he said.

Due to increasing medical costs, the PEIA projects that premiums likely will begin to rise over the next five years.

Some lawmakers questioned why PEIA didn’t bank its surpluses to hold premiums down in the future. Cheatham said cutting premiums makes sense for the agency based on its insurance performance.

While PEIA members will see a reduction in premiums, there will be some co-payment increases for active employees.

Enrollees will pay $50 for specialty drugs on PEIA’s preferred list and $100 per prescription for specialty drugs on the non-preferred list. Each drug on the non-preferred list has an alternative that is just as effective on the preferred list, Cheatham said.

PEIA also will add a $25 co-payment on imaging and outpatient procedures performed out-of-state. This co-payment would apply only to services that also are available in West Virginia.

Cheatham said the goal is to encourage PEIA members living near the state’s borders to seek in-state care.

“It’s to make these people think twice. They might have to drive an extra 10 miles, but we think in the long run it’s going to be much cheaper,” he said.

He said out-of-state care costs, on average, are four times more than the same services inside West Virginia.

The co-pay will not apply to services only available outside West Virginia, or to 400 PEIA members who live around the country and couldn’t return to the state for care.