Governor Jim Justice appointed a Task Force of 29 people at the conclusion of the 2018 Legislature to address the ongoing, increasing costs of the Public Employees Insurance Agency (PEIA). The health insurance program covers about 220,000 people, including state workers, teachers, retirees and their families.
The group met April 10 to begin discussions of the program. When Task Force member Mick Bates, a Democratic delegate from Raleigh County, asked PEIA Director Ted Cheatham what he thought is the primary driver of price increases every year, Cheatham said, “Drug costs have gone up dramatically and are a huge problem.”
He said drug costs increase 5 to 6 percent a year, and PEIA tries to steer people to generics, but more expensive name brand and specialty drugs still make up three-quarters of all drug costs.
PEIA began a 90-day maintenance medication program in July 2017, requiring insureds to purchase large quantities of medications rather than 30-day supplies. This has caused drug expenditures to decline $13.2 million because of a higher than expected drug rebates and savings from the 90-day program.
Reimbursement to pharmacies for a 90-day supply is so low many pharmacies do not participate.
PEIA is a subsidized insurance program. The state pays 80 percent of the costs, while plan participant costs are based on ability to pay. Low wage employees have much lower premium and out-of-pocket costs than higher wage workers.
PEIA will pay out about $1 billion in claims this year and those costs will rise between $40- and $60-million a year.