CHARLESTON, W.Va. (AP) — The 214,000 West Virginians covered by the Public Employees Insurance Agency can expect some new or higher health care copayments while retired enrollees will see a limit to the subsidy that helps them pay premiums, which will rise 9 percent, under provisions approved Tuesday by the agency's finance board.
But officials say the retiree subsidy cap will reduce a projected $10 billion funding shortfall by half. That will allow the state to erase the remaining unfunded liability by 2040, agency Executive Director Ted Cheatham told board members. With each subsidy now at $343, the vote will limit increases to up to 3 percent a year to account for rising health care costs.
The subsidy limit sets the stage for 2012 legislative action to tackle the remaining $5 billion shortfall that involves other post-employment benefits, or OPEB. West Virginia has adopted a tough stance toward tackling these non-pension retiree costs since a 2004 national accounting standard called on government bodies to start calculating their unfunded liabilities.
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But that stance has prompted legal challenges. The state's two main groups representing teachers have sued over the related decision by Cheatham's agency to end retiree subsidies starting with those enrollees hired after June 2010.
One of those groups, the West Virginia Education Association, opposed Tuesday's subsidy freeze. Association President Dale Lee urged the finance board to wait until after the upcoming regular session of the Legislature, which begins next month. He also noted that a proposal from this year's session had included a 4 percent annual increase for medical inflation.
"I'm very disappointed by today's action," Lee said after the vote. "It forces us to negotiate from a position of weakness."
But the American Federation of Teachers-West Virginia supported the move, President Judy Hale told the board. She said the state's handling of the OPEB liability is now driving county school boards to reserve funds for the shortfall instead of spending it on education.
"The people who are really hurt are our poorest kids," Hale said, adding that "We very much want this OPEB problem put behind us."
The benefit changes approved Tuesday total $18 million for active employees and $6.7 million for retirees. They include a $100 copay for emergency room visits, up from $50. But enrollees would pay nothing if they're admitted for actual emergencies, or $50 if the visit was legitimate but did not require admittance.
Urgent care visit copays would rise from $15 to $25, and from $20 to $25 for specialized physician visits. Visits to chiropractors and speech, occupation, physical and massage therapists will cost $10, and that copay will rise to $25 after 20 visits upon approval of a case plan.
The board had weighed ending massage coverage. It instead limits it to certified therapists with malpractice insurance. Cheatham says that will whittle down the number of eligible therapists from 1,100 to around 370. The plan also ends acupuncture coverage.
The board agreed to dip into reserves to avoid charging a $50 copay for imaging services. It also whittled down the list of procedures requiring $500 copays to bariatric surgery and medically necessary dental services. It also voted to require enrollees to pay 75 percent of the cost of certain specialty prescription drugs. Those payments will count toward the annual out-of-pocket maximum of $1,750, Cheatham said.
Tuesday's benefit changes take effect July 1, 2012. The agency insures 214,000 active employees, retirees and dependents.
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