State workers' premiums decrease
CHARLESTON, W.Va. -- State employees will see a $10 decrease in their health insurance premiums next year, although the savings likely will not last.
Public Employees Insurance Agency director Ted Cheatham told lawmakers at an interim meeting on Tuesday actively employed PEIA enrollees will see a $10 decrease in premiums for the 2015 fiscal year, which begins next July.
Cheatham said the agency was able to drop premiums because it is ending its "Improve Your Score" program, which provided blood tests in the workplace. PEIA now is shifting those services back to the physician's offices.
Employees previously received a $10 cut on their premiums for participating in Improve Your Score, but Cheatham said the program has "pretty much run its course." The insurance agency is now partnering with Marshall University to provide workplace wellness programs on fitness, dieting and stress management.
PEIA also is benefiting from a string of good investments that put the agency far under budget. Cheatham said the active employees' program is about $30 million ahead, while the retiree program's trust fund is about $80 million ahead.
"A big chunk of that are investment incomes," he said.
PEIA's retiree members, meanwhile, will see no increase in rates or changes to their benefit plans. Cheatham said 2015 would be the fourth year in a row without premium increases or significant benefit changes for retirees.
But these salad days could soon end.
Cheatham said the agency's projections indicate premiums likely will begin to rise over the next five years as medical costs increase. Inflation on medical services is rising about 5 or 6 percent each year.
"It's still going up. Claims are going to be costing more," he said.
Some lawmakers questioned why PEIA didn't bank its surpluses to hold premiums down in the future, but Cheatham said cutting premiums makes sense for the agency based on its insurance performance.
While premiums will not increase for PEIA members, active employees will see increases to some co-payments after July 2014.
Beginning July 1, enrollees will pay $50 for specialty drugs on PEIA's "preferred" list, and $100 per prescription for "non-preferred" specialty drugs.
Cheatham noted each of the drugs on the non-preferred list has an alternative on the "preferred" list that is just as effective.
PEIA also will add a $25 co-payment on imaging and outpatient procedures performed out-of-state.
Cheatham said the co-pay only would apply to services that also are available inside West Virginia, as an effort to encourage PEIA members living near West Virginia's borders to seek care within the state.
"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 the 400 PEIA members who live around the country and couldn't return here for care.