The state Public Employees Insurance Agency, which manages health insurance for more than 200,000 government workers in West Virginia, is facing resistance to its proposed 35% premium increase over two years. With the agency already facing a $376 million deficit earlier this year, the state Legislature passed a bill increasing health insurance premiums by around 25% in July and introduced a surcharge for spouses opting into the state plan. While Gov. Jim Justice claims that the premium increases are offset by raises for state employees and cuts to state income tax, opponents argue that these measures do not go far enough, especially as West Virginia teachers are among the lowest-paid in the nation.
West Virginia Public Employees Insurance Agency Faces Resistance Over Proposed Premium Increases
The West Virginia Public Employees Insurance Agency, responsible for administering health insurance to over 200,000 government workers, is encountering opposition over planned premium hikes. These proposed increases follow a strike by public school employees five years ago due to escalating healthcare costs.
The agency plans a 35% premium rise over two years for state employees. Local workers have voiced unease during recent public hearings, stating they can’t afford these hikes, despite previous tax cuts and pay increases. During a virtual hearing, Casey Lockerbie, a teacher, argued that her salary has reduced in real terms due to this year’s rise.
Lockerbie, who commutes from a nearby state for work, stated, “We went on strike years ago to fund PEIA. I don’t think this is the solution. You want to attract people to work in the state while penalizing those who do.”
Earlier in the year, the health insurance agency grappled with a $376 million deficit. The GOP supermajority state Legislature responded by passing a bill in July, increasing state employee health insurance premiums by approximately 25%. A new surcharge of roughly $150 has been introduced for spouses opting into the state plan over their employer’s insurance.
The legislation necessitated an 80-20 cost split between the employer and employees by the Public Employees Insurance Agency. The proposed plan would cause an additional 10.5% increase in state employee premiums by next July. The agency’s finance board will make a final decision in December after public hearings this month.
These proposed increases follow a 2021 promise by Republican Governor Jim Justice that premiums would not increase during his tenure. In 2018, school employees staged a strike largely over concerns about the long-term solvency of the Public Employees Insurance Agency. Justice formed a task force to investigate the issue, but no significant policy changes ensued to stabilize the budget.
The governor believes the increases are offset by pay raises. This year, state employees saw a $2,300 increase, and Justice proposes an additional 5% hike next year. He also signed a law reducing the state income tax by an average of 21.25% across brackets. However, opponents argue these raises are insufficient as West Virginia teachers are among the lowest-paid in the country.
During a Charleston hearing, Joe White, a school service personnel union leader, acknowledged the difficult position of the agency finance board due to legislation passed earlier this year. White implored the board to remember that the people affected are “human, they’re families”. He added, “They’re employees working for the state of West Virginia who should be treated with respect.” Retired employees not yet eligible for medicare and city and county employees insured by the agency will also experience increases.