The Public Employees Insurance Agency is proposing increasing premiums by 14% for state employees and by 16% for local government employees during the 2026 fiscal year. (Lori Kersey | West Virginia Watch)
Public employees in West Virginia are upset about another health insurance premium increase, and rightfully so.
The West Virginia Public Employees Insurance Agency increased rates in 2023, but lawmakers passed Senate Bill 423 to provide $2,300 across-the-board pay raises for educators and State Police troopers to offset the costs.
When Gov. Jim Justice signed the bill into law, he said, “We now have as close to a permanent fix to PEIA that we haven’t had in the past.”
Now, not even two years later, PEIA’s finance board has proposed increasing premiums by 14% for state employees and 16% for state employees. Retirees’ premiums would increase 12%.
Sen. Eric Tarr, who chairs the Senate Finance Committee, said that Justice had held PEIA premiums flat for six years, and now members are seeing the increases that were suppressed during that time.
“So they’re realizing it all at once, when it should have happened all along so it’s not such a blow all at once,” Tarr said, “But the reality is, suppressing it for those six years is what’s caused that.”
To understand the situation better, I talked to a retiree of the state — my dad, who worked for the West Virginia Department of Environmental Protections Division of Water Resources from 1971 to 2004.
He said PEIA is great health insurance, and even now that he has Humana Medicare Advantage, which is what PEIA provides to state employees, he’s really happy with the coverage.
The issue, he says, is that while the premiums continue to increase, retirees’ pay remains the same. Retired state employees in West Virginia haven’t had a cost of living increase since 1989. That’s 35 years. The entire 20 years of my dad’s retirement, he has been paid the same amount while the cost of everything has increased.
According to the Bureau of Labor Statistics consumer price index, things today cost 2.55 times higher than what they did in 1989.
In 1989, a car was $12,000. Now the average car costs more than $47,000. Gas was $1.12 in 35 years ago, and on Friday, it was an average of $2.95 in West Virginia.
West Virginia teachers — the lowest paid in the nation — are also dealing with the PEIA increase.
One teacher I talked to agreed that while the coverage is great, teachers aren’t getting cost of living adjustments. She said as a single person, she’ll be OK, but higher rates will hit teachers with spouses and children hard.
The proposed increase includes more than doubling the monthly spousal surcharge from $147 to $350.
In 2018, West Virginia teachers and school personnel held a strike over low pay and high health care costs. As a result, the PEIA Task Force was formed.
“[The 2018 PEIA] task force made recommendations and created a bill that’s been introduced every year, and it’s never seen the light of day,” said Dale Lee, president of the West Virginia Education Association. “So be serious about going to the table and making recommendations.”
According to the Task Force’s website, its last meeting was held in 2019.
On Thursday, PEIA held its final public hearing in Charleston for members to express their feelings on the proposed increases.
“I hope your grandkids feel the weight of the dishonor you have put upon them,” said one teacher.
“There is not a corner of hell dark enough for people who do this,” said another person.
Lawmakers have no solid plans on how to address the issues.
“I think there’s a lot of discussions going on right now,” said Sen Tom Takubo, R-Kanawha, who chairs the Legislature’s Joint Committee on Insurance and PEIA. “I think [PEIA director] Brian Cunningham is doing a tough job of trying to look at every angle and turn over every stone he can to come up with some good solutions, but it’s going to take some time.”
There also seems to be no consensus on why premiums need to be increased.
Takubo said most health care spending is coming from the older population that is sicker as they age.
Meanwhile, Cunningham said rising drug costs are a big driver of the need for an increase. Specifically, GLP-1s that treat diabetes and are used for weight loss accounted for $53 million in net costs for PEIA last year. The agency had a pilot program that covered the cost of the drug, but suspended it earlier this year.
While it’s expensive to pay for the drugs, weight loss will result in less health issues in the future for those people — hypertension, diabetes, sleep apnea, high cholesterol, etc.
PEIA’s high costs aren’t a new issue. The 2025 legislative session starts on Feb. 12, 2025. Lawmakers and Governor-elect Patrick Morrisey have about three months to work on fixing things for public employees.
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