CHARLESTON — While the West Virginia Public Employees Insurance Agency Finance Board is on the road for public meetings getting feedback from state government workers, local government workers, and retirees regarding proposed premium increases, lawmakers are considering changes to help address rising costs.

The Joint Standing Committee on Insurance and PEIA met Monday morning at the State Capitol Building on the second day of November legislative interim meetings.

Committee members heard a report from Brian Cunningham, director of the Public Employees Insurance Agency. The PEIA Finance Board is considering changes to PEIA and Retiree Health Benefit Trust (RHBT) plans for fiscal year 2026 beginning July 1, 2025.

Under current proposals, state employees could face a 14% premium increase at a $27.3 million value, or an average increase of $31.50 per month. County and city employees participating in the local fund would see a 16% premium increase. Public employee retirees in the RHBT fund would see 12% premium increases.

Other proposed increases include upping deductibles and out-of-pocket maximums to 40%, or an average increase of $355 for state employees and $310 for local government employees. The 40% deductible increase would also affect non-Medicare retirees as well. Increases in co-pays and monthly spousal surcharges are also on the table. The proposed increases would bring in $113 million in revenue for PEIA in fiscal year 2026.

Cunningham presented three public policy ideas to lawmakers Monday during his presentation that could help address and limit future premium increases and out-of-pocket expenses. One way is for lawmakers to address confusion in a 2023 law reforming PEIA.

Senate Bill 268 returned PEIA to an 80/20 employer-employee match for state employees beginning in July, with the employee/employer match going to 70/30 for out-of-state medical care for non-contiguous out-of-state counties.

Among other reforms, SB 268 set the reimbursement rate for all health care providers at a minimum level of 110% of what Medicare reimburses providers. Cunningham said that requirement should be changed to only hospitals and not all health care providers.

“I wasn’t here when Senate Bill 268 was passed, but it was my understanding that Senate Bill 268 was intended to target reimbursement for in-patient hospitals,” Cunningham said. “It has been interpreted by previous folks at PEIA to include all health care providers. What we would like to consider at PEIA is not paying 110% to all health care providers. In fact, what we see at PEIA is that we are overpaying compared to national averages for some services.”

Cunningham also told lawmakers they could consider putting limits on “gold card” prescribers, meaning doctors who are allowed to approve prescriptions for PEIA patients without prior authorization.

“One of the things that has come up recently is an interpretation that any provider that is gold-carded can write a prescription with a PA (prior authorization),” Cunningham said. “I think the Legislature has an opportunity to clarify that, because I don’t believe that was the intent of the Legislature.”

Cunningham explained that gold-carded prescribers can sign off on expensive medication, such as the popular injectable GLP-1 drugs (Ozempic, Wegovy, etc.) without having an approved diagnosis, such as type-II diabetes. Doctors are prescribing injectable GLP-1’s for weight loss and not because of specific diagnosis. According to PEIA, GLP-1 drugs had a cost of $52.5 million, or 19.9% of overall PEIA costs.

“We have (prior authorizations) on things like GLP-1s for a reason,” Cunningham said. “If a gold-card provider can write a prescription for Ozempic…with a PA, then PEIA has no way to control that those drugs are only dispensed to people with a diagnosis for type-II diabetes.”

State Senate Majority Leader Tom Takubo, R-Kanawha, is a pulmonologist with WVU Medicine. He said lawmakers need to be careful about any future changes to health care provider reimbursements.

“I just want to be careful that we don’t pull back on something that everyone loses services on, then everybody is outside our doors,” Takubo said, alluding to the strikes in 2018 and 2019 by teachers and school service personnel overpaying and PEIA benefits.

“We are turning over every stone; literally turning over the couch cushions at PEIA to find the loose change,” Cunningham said.

“I know you guys are taking a hard look. I’m just looking ahead for unintended consequences,” Takubo said. “We can do things with great intent and then realize we’ve hurt something else.”

One of the biggest issues driving PEIA costs is the rate of inflation and the utilization of prescription drugs. According to PEIA reports, total prescription net plan costs were $256.5 million in fiscal year 2024 between July 2023 and June 2024, a 16.6% increase from $220.1 million in fiscal year 2023. The cost is expected to increase for fiscal year 2026.

“We cannot continue to see 21% inflationary trends in prescription drugs,” Cunningham said. “If that happens, there’s going to be major premium increases and changes to benefits going forward perpetually. We have to bend the curve; we have to reduce the trend. We have to get prescription drug spending under control.”

One way to improve PEIA’s ability to negotiate with pharmacy benefit management companies for lower prices is to have more members. Cunningham said PEIA has more than 155,000 total active members and 56,000 retirees, down by between 10,000 and 15,000 members over the last several plan years. Cunningham proposed opening up the non-public pool to additional county and city public employees with guardrails.

“At a high level, the more members PEIA has, the better deals we get with vendors,” Cunningham said. “Unfortunately, PEIA has been shrinking over the last couple fiscal years…My intent with suggesting we re-open the non-state pool is that we allow anybody who wants to participate in PEIA that is a local entity to come in, but with some really tight guardrails on who is allowed to participate.”

House Deputy Speaker Matthew Rohrbach, R-Cabell, is co-chairman of the Joint Standing Committee on Insurance and PEIA and a physician in Huntington. He also was a key supporter of SB 268 in 2023.

Rohrbach said he was concerned about opening back up the non-public pool and upsetting health care providers who could lose money from some local government workers switching to PEIA. A moratorium was put in place in 2021 on allowing additional local governments to participate in PEIA.

“If those people get in at a drastically diminished fee schedule, that is going to hurt the local providers in their local communities,” Rohrbach said. “Somebody is going to pay, right?

“There was a lot of pressure put on this legislative body when we did that moratorium around those very concerns,” Rohrbach continued. “As you look at that, we’re going to have to take that very seriously. Whatever we would do or not do, we’re going to have to work with the provider community.”

The PEIA Finance Board held their third public hearing on the proposed increases Tuesday at 5:30 p.m. at the Holiday Inn Martinsburg; and Thursday at 5:30 p.m. at the Highlands Event Center in Wheeling. Other meetings are scheduled for Morgantown at the Erickson Alumni Center on Tuesday, Nov. 19; and Charleston at the Culture Center on Thursday, Nov. 21. A virtual town hall is also scheduled for Nov. 18. The PEIA Finance Board will finalize a plan on Dec. 5, and vote to approve the final plan on Jan. 1, 2025.