Thumbs up: Cost-saving strategies, investments pay off
West Virginia’s state and public school employees who get health insurance from the Public Employees Insurance Agency can thank themselves and a rebounding stock market for a freeze on the premiums they must pay.
The PEIA’s Finance Board tentatively approved a plan for the 2014-15 budget year that keeps premiums for the roughly 75,000 covered employees and retirees at the same level for the third straight year. Considering the pattern of rising health care costs and premiums elsewhere, the recommendation was welcome news. A final decision is expected in December.
Two major factors played in to keeping premiums flat, PEIA Executive Director Ted Cheatham said. One was the agency’s ability to post strong investment earnings in the 2012-13 budget year, he said. The other had in part to do with how employees made use of health care services.
Cheatham noted that medical claims costs declined 2.7 percent and prescription drug expenditures dropped 4.2 percent last year for active employees. The PEIA had implemented a program encouraging employees to use generic equivalents instead of expensive brand-name prescription drugs.
The plan does include two changes designed to help hold down costs. One is a $25 co-pay for certain out-of-state services and equipment because those generally cost significantly more than discounts PEIA obtained from in-state providers. The other is a $100 co-pay for specialty drugs not on PEIA’s preferred list because those drugs can cost thousands of dollars per prescription. Those changes seem reasonable and are in line with the notion of keeping costs — and premiums — close to current levels.
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