By PHIL KABLER
Charleston Gazette-Mail
CHARLESTON, W.Va. — Privatization of West Virginia’s Workers’ Compensation insurance was successful, particularly in lowering employer premiums and increasing competition, Brickstreet Insurance CEO Greg Burton told legislators Tuesday.
Whether those successes would apply to privatization of the state Public Employees Insurance Agency health insurance remains to be seen, he said.
“I’m not sure all the successes that happened with Workers’ Comp privatization, particularly with the decreases in rates…would translate over to PEIA,” he told a legislative interim committee studying PEIA.
Burton, who was executive director of the state-run Workers’ Compensation Division when legislation privatizing the plan was enacted in 2005, and oversaw its transition to a private company on Jan. 1, 2006, recounted the process for legislators Tuesday.
While stressing the differences between health insurance and insurance that provides benefits to workers who sustain workplace injuries, Burton said there are certain guidelines to follow regarding privatization.
He noted that West Virginia modeled its legislation privatizing Workers’ Comp on Nevada law, and said, “I would take a look to see if other states have privatized their equivalent of PEIA.”
According to a report on state employee health benefits published by the National Conference of State Legislatures on April 2, only two states exclusively use private insurers to provide health insurance to public employees, Idaho and North Dakota.
According to the NCSL, 29 states, including West Virginia, have fully self-funded health insurance plans, while the remaining 19 states provide employees with coverage options, including self-funded plans.
Burton said the Workers’ Comp experience also showed it is important to retain consultants with expertise in privatization.
“Go find some people that have been through this and can help you through this,” he said, adding, “As one consultant told us, ‘You don’t know what you don’t know.’”
Burton said it is also important to assure that all parties involved in the conversion have a voice in the process.
“I would encourage you to make sure everybody has a seat at the table,” he said.
As to whether it makes sense to proceed with privatization of PEIA, Burton commented, “I would argue state government does a lot of things very, very well. Workers’ Comp coverage is one of the things states have gotten away from.”
Currently, only four states still operate state-run Workers’ Compensation insurance programs, he said.
Reach Phil Kabler at [email protected], 304-348-1220 or follow @PhilKabler on Twitter.
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