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NEWS
PEIA director says 9% increase is actually lower than anticipated
HUNTINGTON -- Hundreds of angry state employees, both active and retired, packed the Harless Room at the Marshall University Medical Center Thursday evening to speak out against proposed increases to their Public Employees Insurance Agency health insurance premiums.
The most compelling evidence that PEIA has enough money in reserve to cover increased expenses came from Marshall University accounting professor Maurice Lockridge. He said he computed numbers all day and kept coming up with the same answers. PEIA had a $32 million operating surplus in 2007 and earned $22 million in investment income.
In addition, he pointed out that projected expenses have been higher than actual expenses for the past few years.
"So you are asking for a 9 percent increase in premiums to cover a 7 percent projected increase in cost," Lockridge said. "For the past five years, actual costs have been lower than projections."
PEIA premiums are calculated by an employee's income, without regard to family size.
But Ted Cheatham, the director of PEIA, said 9 percent is actually a lower amount than what he anticipated last year. And although the plan is listed with four years worth of numbers, it is looked at every year and adjustments are made - good and bad - to premiums and benefits as necessary.
"So next year, it could come in lower than we've projected or higher, and we'd have to adjust," Cheatham said.
He also said under current rates, PEIA cannot operate in the black without increases.
"Unless we want to end up in the red, we need an increase of premiums or a decrease of benefits," he said, adding that six public hearings have drawn a lot of criticism and frustration.
Cheatham said he isn't out to get people. Neither are any of the nine financial board members who will vote on a package Dec. 4 in Charleston, he said.
Board member Troy Giatras, a Charleston attorney who runs his own practice, told the audience he pays 100 percent of his employees' health insurance, which is the same as his own families. And he said, under Blue Cross Blue Shield, he's had to incur 15 percent increases the past two years.
But many people spoke out, saying their wallets and pocketbooks are already being stretched.
"You look around this room and a lot of people are on fixed incomes," said Sid Fragale, a staff representative for the American Federation of Teachers in West Virginia. "When do we say, 'We can't pay anymore?'"
And it's the retirees who would be taking the most serious hit, with an 11 percent increase in premiums next year. Cheatham said claims among retirees were up compared to younger employees still working.
However, many people said neither the active or retired employees could afford the increase, which comes along with slight jumps in co-pays and changes to the prescription plan that would push for more generic drugs.
Many who spoke also said asking people to pay more for health coverage could cost the PEIA more, as some may put off going to the doctor because they can't afford it.
"What good is my insurance if I can't afford to use it?" said Phyllis Apple, an active employee for Cabell County Department of Health and Human Services.
Roy Nutter, a computer engineering professor from West Virginia University, in Huntington representing higher education faculty, also said PEIA would incur serious costs down the road by not listening to employees now.
"It leads people to not go to the doctor when they need it," Nutter said. "They put it off until they become seriously ill and are admitted to the hospital, costing PEIA much more."
The plan, in whatever form it is approved, must be sent to the governor by January and will take affect June 30, 2009.
