LEGISLATIVE BATTLE CONTINUES ON PEIA INSURANCE CUT FOR TEACHERS, STATE EMPLOYEES

The state budget fight continues in the legislature over cutting health insurance benefits for state teachers and employees, while WV teachers are among the lowest paid in the nation.

Proponents for filling the short-fall say the Republican led legislature declined to sufficiently raise taxes on tobacco products and other products to fill the hole, while Republicans say the state budget needs to be reduced, with a budget shortfall of up to $700 millions dollars, a problem created by the tax decline on coal and natural gas.

PEIA cuts on front burner again

By Phil Kabler, Staff Writer GAZETTE MAIL

Cuts in public employee health care benefits totaling $120 million are expected to be back on the table when West Virginia’s Public Employees Insurance Agency Finance Board meets Wednesday.

In January, the Finance Board approved a plan that would use $43.5 million in new state funding for employer premiums to alleviate the need to increase employee co-pays, deductibles and out-of-pocket maximums to keep the health insurance plan solvent.

However, that plan was contingent on passage of a Tomblin administration bill to increase state tobacco taxes — a bill that died in the House of Delegates during the recently completed regular session of the Legislature.

The likelihood of additional funding for PEIA premiums is in limbo as the Legislature moves into the 12th day of an impasse on passage of a 2016-17 state budget.

“Without the guarantee of additional revenue to fund the plan that was approved in January, the board cannot proceed with that plan,” Department of Administration spokeswoman Diane Holley Brown said Wednesday. “We don’t have the guaranteed funding, so we possibly will have to go in the other direction.”

The other direction would be a plan approved by the Finance Board in December that closed the $120 million revenue gap by cutting benefits for the roughly 230,000 teachers, school service personnel, public employees and retirees covered by PEIA.

That plan calls for increasing deductibles by $500 for single coverage and $1,000 for family coverage, and raising annual out-of-pocket maximums by $1,500 for single coverage and $3,000 for family plans.

It also would increase prescription drug costs, most significantly raising the co-pay for preferred brand-name drugs from $25 per prescription to 30 percent of the actual cost.

“Without a budget, there’s no guarantee of additional funds for PEIA,” said Chris Stadelman, spokesman for Gov. Earl Ray Tomblin.

“Governor Tomblin submitted a statutorily sound, fiscally responsible budget that increased revenue in a way that would have allowed an additional $43.5 million for PEIA,” he added.

Stadelman said Tomblin particularly has issues with the proposed House budget bill, which would have used Rainy Day reserve funds and other one-time funding sources to pay for the PEIA premium increases and other programs — which Tomblin has said would serve to push state budget shortfalls back by only one year.

“We continue to be willing to work with the Legislature — particularly the House, which has been more problematic — to get a longterm plan that faces the challenges going forward,” Stadelman said.

Wednesday morning, representatives from the Governor’s Office, Department of Revenue and House and Senate leadership met to discuss options for the 2016-17 budget.

Stadelman said one option raised Wednesday is to lower state contributions into government employee pension plans to free up additional cash — an alternative Tomblin immediately rejected on the grounds that it likely would result in an immediate downgrade in West Virginia’s bond ratings.

“It would be an indication we are not paying our bills,” Stadelman said. “We believe revenue increases are going to have to be part of any responsible fix.”

In addition to the tobacco tax, several other tax increase measures were defeated in the House during the regular session.

Wednesday afternoon, Senate President Bill Cole, R-Mercer, and House Speaker Tim Armstead, R-Kanawha, issued a joint statement critical of the announced PEIA Finance Board meeting, saying the Legislature remains committed to funding PEIA.

“It’s just unfortunate that PEIA is once again being used as a political football for the sole purpose of gaining leverage in the budget process,” Cole said. “At this time of fiscal crisis, we need to have a serious debate about how much government we want and how much we want to tax our people for it. Using scare tactics about people’s health insurance is not the way to accomplish that.”

In the statement, Cole and Armstead emphasized the need to reduce the size of state government.

“We have to fundamentally change and rein in our bloated government before we ask our citizens for more money,” Armstead said.