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PEIA ALERT!

 

PEIA Talking Points


            The PEIA Finance Board has put forth their proposal for its next fiscal year, and there are several parts of the proposal that AFT-WV finds troubling, the most disturbing of which is the board’s proposal to eliminate benefits for Medicare-eligible retirees.  AFT-WV encourages all employees to review the proposed plan at www.wvpeia.com to see how the proposed changes will affect you and your family. We also strongly encourage everyone to speak at the PEIA Public Hearing (see dates below) and have prepared some talking points below for employees.


 


The Good:




  •       Active employees will NOT face a premium increase next fiscal year (however, other costs are increasing-see below.)


  •       The state will move to an MAPD program for Medicare eligible retirees.  What is an MAPD?  MAPD is third party administrator designed to develop and manage a health care program using Medicar  dollars.  Why is it good?  Each year, Medicare pays claims worth X amount of dollars in West Virginia.  The administration for the payment of those claims is covered by the federal government.  Well, the feds don't really want the hassle of administrating the plan, so, they allow for states to move to this MAPD.  In this circumstance, the federal government  will send West Virginia (either PEIA or MAPD administrator) roughly 104% of projected Medicare costs for the next fiscal year instead of dealing with the administration part of it.  Simply put, we will bring in more federal dollars for Medicare eligible retirees under an MAPD (104% versus 100%).



  •        Medicare eligible retirees will see a reduction in their premium of about $70 per month. 

The Bad:




  •      The state of West Virginia (PEIA) will no longer provide health care to Medicare eligible retirees.  As it works now, when a member turns 65, Medicare is primary and PEIA serves as secondary provider.  Under this proposal, there are no coordination of benefits between Medicare and the state, just Medicare.  Now, keep in mind we are going to be receiving more Federal dollars for the these folks, however, it does NOT come close to the amount PEIA covers as a secondary coverage.


  •      We fear that the proposed PEIA plan is the first step in eliminating all state-provided benefits for future retirees.

     



  •      As large numbers of public and education employees are approaching retirement in the next 5-10 years, this proposal stands to harm every public employee in West Virginia 

     



  •      While we are pleased that active employees are not having their premiums increased, it is bad public policy for the state of WV to be balancing the budget on the backs of retirees.


  •      Active employees as well as retirees will see an increase in their out-of-pocket expenses as both the prescription co-pay and deductibles are being increased.


  •      Policymakers are proposing this move to cut costs and are blaming what   they claim to be an $8 billion liability. But the actual liability is only $266 million. Here’s the story:


     The reason the Finance Board is moving this direction is because GASB (Government Accounting Standards Board) is requiring state governments to report future liabilities for the health care of all retirees and all actives as of today.  That number is $8 billion.  However, GASB only requires the state to report 1/30th of the total liability, or $266 million, in any given year.  Unfortunately, the state is using $8 billion as a scare tactic,  when the number they should be using is $266 million. 


    However, since the state wants to talk about the $8 billion, let's talk about it.  They claim they want to reduce that number. AFT-WV agrees… lets reduce it.  If PEIA moves to an MAPD without changing any benefit or keeping the benefit level as is for Medicare eligible retirees, then that number moves from $8 billion to $5.5 billion.  WOW!  That is a 31% reduction without changing anyone's benefit.


 


The Downright Ugly:




  •      Again, we must stress that we fear that the proposed PEIA plan is the first step in eliminating all state-provided benefits for future retirees. If public employees lose this benefit, we will never get it back!

     



  •     The proposed PEIA plan represents cost-shifting as its worst as the proposal increases the cost of health insurance on the backs of those who can least afford it – our retirees.

     



  •      Retirees who need insurance the most (those with chronic conditions and who are in need of regular medical attention) will be hurt financially the most.

     



  •      Out of pocket costs will be higher for Medicare eligible retirees. Based on average to high utilization rates, retirees will see an increase in their healthcare costs of approximately $30 to $85 per month. 

     



  •      Retirees do not receive cost-of-living increases.  For those on fixed income (the vast majority of our retirees), this proposal will significantly reduce their month income and force retirees to choose between seeking medical care or purchasing groceries.


 Miscellaneous:




  •        Rather than balancing the budget on the back of our retirees, AFT-WV believes we should be proactive and concentrate on long term plans for health care management.  It is estimated that 80% of health care expenditures are for those with chronic illnesses.  Studies show that with substantial and practical education programs like disease management programs, medical directors and tobacco cessation programs, those expenditures are drastically reduced.

     



  •       Although the proposed changes are going to drastically affect some retirees (mostly those that are the sickest and oldest), it is only a drop in the bucket to what will happen to the future 65ers.  Here’s why….  Since this is the first year of the change, PEIA has gone "over the top" to make the impact as seem as minimal as possible.  PEIA has not discussed future retirees.  Also, the US Congress appropriates monies for Medicare.  What happens if they appropriate less money next year or 5 years from now?  Will the state come back and pick up those costs?  If so, where will they get the money?  We happen to have a good economy now and can help some of these folks.  What happens when the economy turns sour?  Will our current or any future governor step up to the plate?


  •       We believe this is the first step in eliminating health care for retirees.  The state of WV has never appropriated money in the retiree subsidy line item and never will.  It has always been the active employees that carry the retirees, not the state. This proposal makes one wonder…What's next for retirees, removal from drug plan and even worse, removal of pre-Medicare benefits?


  •       Teachers in WV make less than every contiguous state.  One benefit that helps attract and retain highly qualified teachers is the PEIA benefit upon retirement.  By removing that benefit, it will amputate one of the legs we have been standing on for years


  •      When teachers retire, they look at future costs related to health care.  What are we going to do with those retirees at 62 or 63 who did not plan for these dramatic health care cuts?  The legislature has never funded a COLA and probably never will;  not until the pension debt is stable.  These folks may only be left with one option: bankruptcy.


 


Feel free to use these talking points at the PEIA Public Hearings.


Hearing schedule is as follows:


Customer Service 4 - 6 p.m.

Hearing Registration begins at 5:30 p.m

Public Hearing from 6 – 8 p.m.


Those wishing to speak must indicate that at registration.







Monday,
December 4


Martinsburg
Holiday Inn
301 Foxcroft Avenue


Tuesday,
December 5


Wheeling
Northern Community College

1704 Market Street


Thursday,
December 7


Morgantown
Ramada Inn
119 S. at I-68 and I-79


Monday,
December 11


Charleston
Charleston Civic Center
200 Civic Center Drive


Tuesday,
December 12


Beckley
Tamarack
One Tamarack Park


Thursday,
December 14


Huntington
Marshall University Medical Center
Joan C. Edwards School
of Medicine
Harless Auditorium

1600 Medical Center Drive


 


 

Customer service sessions will be offered from 4 - 6 p.m., providing members an opportunity to ask benefit questions of customer service specialists.