Reaction to PEIA potential increases range from 'frustrating' to 'just a mess'

CHARLESTON — Reactions have been as expected to the Public Employees Insurance Agency's proposed increases in health insurance costs for West Virginia's public workers.

"I just think the whole thing is just a mess," said Janie Burdette, a retired schoolteacher in Point Pleasant. "It's been that way since the beginning of time."

The PEIA presented that possible increase and others in a recent plan for Fiscal Year 2026. The PEIA Finance Board meets on Thursday to further review the proposal, as well as dates for public hearings.

What's in the draft?

Here are the proposed PEIA cost changes in Fiscal Year 26 (July 1, 2025-June 30, 2026):

Premium increases of 14% for public employees in the state fund, or 16% in plans for local government entities40% increase in deductibles and out-of-pocket maximums for employees and non-Medicare retireesIncrease in the spousal surcharge from $149 to $350Other increases in copays — including certain therapies, emergency room visits, inpatient and pharmacy charges

Feeling the impacts

Public employees covered under PEIA include:

Teachers (secondary schools and higher education)State government workersLaw enforcementCorrections officers and staff

There are also many retirees who fall under PEIA plans, like Burdette, who taught for 19 years at a private school, and 18 years in public school.

She retired in 2014 from her job as a first-grade teacher at Leon Elementary School in Leon, Mason County. Her husband Gary, who taught for 34 years in public schools, died in 2017. Like many retirees who were public employees in West Virginia, she and her husband used PEIA health insurance coverage. Burdette continues to rely on that coverage but as a retiree, pays for it with a flat income.

In the past few years, public employees had seen cost-of-living raises to at least help offset the rising cost of PEIA.

"I get what I get," Burdette said. "I was expecting a gradual increase. That's just life. Same way with your power, and your electric (bills). But gradual increases, not a 40% jump," referring to proposed deductible increases.

'It's all very frustrating'

State Sen. Amy Grady, R-Mason, chair of the Education Committee, is also a public-school teacher who is covered under PEIA.

"It's all very frustrating," Grady said in an email.

She talked about her vote for Senate Bill 268 in 2023, saying she supported that legislation to prevent these types of significant increases on policyholders. One of the mechanisms of SB 268 was to get premiums back to an 80/20, employer/employee split.

"When the need for SB 268 was being discussed, we [legislators] were told [by PEIA representatives] that bringing it back to the intended 80/20 split would make PEIA solvent," Grady said. "It was also said that SB 268 would prevent large increases on policyholders and without passing SB 268, they were certain policyholders would see large increases."

Grady said legislators were told by passing SB 268, policyholders would see increases of about 10.5% in fiscal years 25-27. That increase was "understood," Grady said, adding she didn't want to vote for any increases in PEIA.

"However, I also knew kicking the can down the road further without actually doing something would make large increases inevitable on policyholders," she said. "So we needed to do something instead of continuing to put if off."

Jump to 2024, and Grady said this latest draft proposal left her with more questions than answers regarding the larger increases SB 268 was supposed to prevent, "My issue is — less than two years later — they [PEIA] are now saying they need increases on premiums, deductibles, out-of-pocket maximum, prescription co-pays, and on the spousal surcharge?"

Contributing factors

At the Joint Standing Committee on Finance held during October legislative interims, Brian Cunningham, director of PEIA, spoke to legislators about the contributing factors to the rising costs of PEIA and a plan to move forward.

According to Cunningham, in FY24, PEIA spent $53 million on GLP-1 drugs (commonly used in treating diabetes or obesity), which is 20% of the total drugs spent at PEIA.

Drug rebates were also down from projections. There were increases in:

Out-of-state care costsInpatient rate costsUtilization of outpatient care

{p class="tncms-inline-link"}Cunningham said the PEIA Finance Board proposal would include a series of benefit changes, such as, "increasing copays and deductibles, right sizing the spousal surcharge and adopting premium increases that will generate $113 million in FY26 and bring us back to the 10% statutory reserve."

PEIA is statutorily required to maintain a reserve at no less than 10% of the total plan costs in any fiscal year. Legislators approved an $87 million supplemental appropriation to build up PEIA's reserve fund during the special session.

Cunningham also spoke about cost savings initiatives PEIA was undertaking like programs to shifts to low-cost generic drugs, pausing a weight management program, instituting a digital wellness plan and not filling open positions at PEIA.

'It's not right'

At this point, the PEIA proposal is just that: A proposal.

"But when you have a proposal, you've always got the ones who want the proposal," Burdette said, adding that she thinks the proposal may not be altered much, if at all.

"Teachers (and all public employees) worked long and hard for their money," she said. "It's a difficult job, and it's not right for them to feel like you're a burden. That's what it feels like. Like you're a burden to the state because of your insurance."

The Gazette-Mail requested a comment from a PEIA Finance Board member but did not hear back by deadline.