CHARLESTON, W.Va. — Short of the governor approving more than $100 million in new state funding for premium increases, the Public Employees Insurance Agency Finance Board will have to steel itself this fall to come up with cuts in benefits for the PEIA health insurance program to close a projected $145 million budget deficit, board members were told Thursday.
“Only in the land of milk and honey should we expect to get an additional $145 million,” board member Josh Sword said. “This board is going to have to make some really difficult decisions six or seven months down the road.”
For the first two-thirds of the 2014-15 budget year, PEIA’s bottom line is down about $65 million from the same point last year, a combination of a spike in expenses for medical and drug claims and a downturn in investment earnings, primarily from its stock portfolio managed by the state Investment Management Board.
Jason Haught, PEIA chief financial officer, said the $41.6 million jump in medical and pharmacy claims expenses is being driven by increasing costs, not by a higher rate of use.
“It’s not folks using more services. It’s the cost of the services,” he told the Finance Board.
“It doesn’t look like Obamacare is coming anywhere close to stabilizing medical costs as intended…