The Joint Standing Committee on Insurance and PEIA met Tuesday afternoon during legislative interim meetings at the Capitol to receive a report from Ben Lewis, managing director of Strategy and Innovation for BDO USA, regarding possible cost savings for the Public Employees Insurance Agency (PEIA).

The firm was commissioned by the Legislature to conduct a study to evaluate the current state of PEIA, using financial analysis comparing the program to other states and to provide recommendations to the Legislature.

Lewis gave lawmakers an extensive list of choices that could improve the finances of the Public Employees Insurance Agency, including possibilities like removing city and county employees from eligibility, ending the spousal option and bolstering fraud detection capabilities.

According to Lewis, the potential result could be annual savings of about $55 million. That accounts for roughly 5 percent of PEIA’s total annual cost of around a billion dollars.

Lewis stated that generally, plan participants appear to be satisfied with the benefits offered by the PEIA, including the relatively low premiums and out of pocket maximums when compared to the private sector.

The report concluded that PEIA’s recent and anticipated annual premium increases of about 14 percent are justified given that costs were frozen for people in the program between 2018 and 2022.

The top reason given for increasing expenses was prescription drug coverage. That’s primarily driven by specialty drugs, especially medications like Ozempic and other similar brands that are prescribed for diabetes and popular for weight loss, according to Lewis.

The report offered lawmakers nine options for keeping PEIA cost increases at bay. They report’s options with estimated potential savings are as follows:

1. Improvement of Wellness Programs: Doubling investment in wellness programs and targeting chronic conditions could lead to net savings of $1.7 million by increasing participation and reducing claims.
2. Eliminating Spousal Surcharge Participants: Removing policyholders whose spouses have employer-sponsored insurance but opt for PEIA coverage could result in an expense reduction of $15 million.
3. Improved Anti-Fraud Protection: Implementing large anti-fraud team coupled with anti-fraud software could save between $17-$27 million annually through fraud recoveries.
4. Reduction of non-state (county and city) employee members: This could decrease the number of policies by more than 15,000. This would have $1 million in net savings, but local governments would need a full year to begin seeking requests for proposals from private health insurance companies to replace PEIA coverage.
5. Importing Prescription Drugs: The possibility of importing additional drugs from Canada is estimated to generate $5.3 million in annual savings.
6. Supplemental Drug Coverage: Partnering with discount programs like GoodRx and Cost Plus Drugs could save PEIA between $1.1-$3.3 million a year by offering member discounts outside traditional coverage.
7. Specialty Drugs: Hiring staff  to focus on more efficiency for specialty prescription drug use through site-of-care management and annual market checks could save roughly $8 million a year.
8. Incentivizing more use of High-Deductible Health Plans and Health Savings Accounts: Additional people to making modest PEIA contributions for such accounts could save between a half million and $1.6 million annually by creating more consumer-driven healthcare choices.
9. Family Income Rate Tiering: Adjusting premium levels based on total household income (including income from outside PEIA employment) could increase premium revenue by an estimated $20 million, promoting fairer cost sharing.

State Higher Education Chancellor Dr. Sarah Armstrong Tucker appeared before the Joint Standing Committee on Education Monday evening to present research her team has conducted on why West Virginia students are not attending higher education institutions at a higher rate.

According to Tucker, the current college-going rate in the state is 47.4 percent. This includes students attending two-year and four-year institutions, public or private, in-state or out-of-state. She said this figure needs to dramatically improve if the state’s workforce participation numbers are ever going to improve.

Tucker gave the committee some conclusions after analyzing their High School Opinion Survey, which is used to gauge student’s thoughts and experiences in the college decision-making process.

“Every two years we survey all of the high school seniors in the state of West Virginia and we ask them questions about how they’re making decisions about their future, what’s important to you, what do you think you want to do after high school, how did you make that decision, who helped you make that decision,” Tucker said.

Tucker said the top answer in the latest survey regarding whether or not to attend college was affordability.

She said that this prompted them to look at tuition in the state. The average tuition for a four-year college is $9,000 and for a two-year college is $4,800. This, in turn, got them looking at financial aid and the student aid index.

Tucker believes students have a tough time determining financial aid eligibility. They also don’t know enough about the application process, requirements, and how financial aid awards are distributed.

“What I’m hearing from the students is this process is way too complicated, it’s too hard, and they don’t understand it,” Tucker said.

Tucker was optimistic, noting that those are structural problems that can be fixed by simplifying the process and educating the students and parents.

“I think that if we can work together, to help streamline some of these processes, some of these rules, some of these requirements we can make it easier for our students to see themselves as college students in West Virginia,” Tucker said.

West Virginia’s secretary for human services, Alex Mayer, addressed members of the Oversight Commission on Health and Human Resources Accountability during interim legislative meetings Monday afternoon at the Capitol.

Mayer emphasized his agency’s continued focus on child welfare needs and the staffing required to meet those needs.

West Virginia’s current child welfare dashboard shows 6,000 current children in the system.

Mayer said one area of heavy focus is the on the state’s foster care children that are housed in hotels. Currently 18 children are in that situation in West Virginia.

“These children are not remaining in hotels because we don’t have enough beds, because we don’t have enough foster parents. It has to do with the complexities and the challenges that these children are facing,” Mayer said.

Mayer noted his agency has been working tirelessly with providers to better understand the needs of foster care children and the ways  the agency can help boost their capacity and their ability to support these kids.

He mentioned that sometimes the issues and the needs of the children are so complex they need to go out of state to get proper care. Mayer said that currently West Virginia has around 600 children in out of state placements.

West Virginia has long had issues recruiting and retaining Child Protective Services workers. Mayer reported progress on that front, telling the committee that the state’s most recent vacancy rate in those jobs was at just 8.3 percent.

The state’s child welfare issues have long been interwoven with the drug addiction problem. Mayer emphasized that the state’s drug overdose numbers are down for the fourth consecutive month and are approaching levels of a decade ago.

State Revenue Secretary Eric Nelson described a moving target and balancing act as state officials begin to devise next fiscal year’s budget. Nelson was speaking before the Legislature’s Joint Committee on Finance during September interim meetings on Monday morning at the Capitol.

Nelson highlighted a number of variables that are likely to create a challenging budgeting process, including the increased costs associated with PEIA and as much as a $200 million cost increase for the HOPE Scholarship program next year.

He told lawmakers the fiscal year 2027 budgeting process is already underway.

“All of the agencies have submitted their initial budgets to the Budget Office as of Sept. 1,” Nelson said. “As is normal, our process begins here in September. The budget teams puts this together, then we will roll into having budget presentations in person by the agencies in October. That product will be put together in November and December and be presented to you all in early January.”

Director of the State Budget Office, Mike Mckown, had positive news, telling lawmakers that the state has around $2 billion in its various reserve accounts. He noted that the state’s various Rainy Day Funds grew by about 7.3 percent over the last fiscal year.

The Income Tax Reserve Fund, which was established to safeguard against the lost revenues from reductions to the personal income tax, has a balance of more than $460 million, according to Mckown.

The Joint Committee on Children and Families met Sunday afternoon during September legislative interim meetings, receiving updates on mechanisms intended to hold child placement agencies accountable and provide better communication between state government and foster families.

Members received a report from Kendra Boley Rogers, the deputy commissioner for policy and programs at the Department of Human Services, on performance-based contracting for child placement agencies.

The performance measures include items the state is measured against during its federal review process by the Administration for Children and Families’ Child and Family Services Review through the U.S. Department of Health and Human Services.

Other measures include tracking recruitment and retention of foster parents by the child placement agency, as well as the length of time a family has provided foster care.

Brandon Lewis, DoHS Chief of Technology and Information, provided lawmakers an update on the state child welfare electronic portal.

Lewis described the Communication and Operations Mobile Engagement Tool, or C.O.M.E.T., that officially went online at the beginning of the month, first in Randolph County.

C.O.M.E.T. is intended to provide information regarding appointments, visitations, travel and other services available to a foster child, as well as information regarding court hearings and meetings with guardians ad litem and multidisciplinary teams. Health records for the foster child and other information is also available.

According to Lewis, C.O.M.E.T. will be rolled out to Mason, Monongalia, Wirt,  and Putnam counties next, with a gradual statewide rollout planned over the next three months.

Lawmakers heard a report Monday morning regarding fiscal year 2025 budget matters from Peter Shirley, deputy secretary for the state Department of Revenue, during the second day of June interim meetings at Stonewall Resort State Park in Lewis County.

As of the end of May, fiscal year-to-date tax collections for the general revenue budget of $4.9 billion were 5 percent more than the $4.7 billion revenue estimate, leaving West Virginia with $236.9 million in surplus tax collections before fiscal year 2025 ends on June 30. Much of that surplus has already been appropriated.

Shirley said the state anticipates some significant budget pressures in the coming years, including increased costs associated with the Public Employees Insurance Agency (PEIA) and monetary support for the Hope Scholarship program, which aids students seeking education outside the public school system.

Shirley told lawmakers that state financial officials anticipate a $49 million cost increase for PEIA for fiscal year 2027 and a $56 million increase for fiscal year 2028.

“PEIA is obviously something that there’s a lot of discussions regarding a lot of work being done to try and think about the long term future of how we how we stabilize PEIA,” Shirley said.

The cost of the Hope Scholarship is expected to eventually balloon to as much as $300 million annually. The cost of the program in the proposed fiscal year 2026 budget is $110 million, up from $45 million in the current fiscal year. Shirley said the cost is likely to go up up by an additional $190 million in fiscal year 2027.

The scholarship amount for each student is expected to be $5,267.38 for the 2025-2026 school year. Shirley said the cost to the state is a mathematical problem of how many students opt in to the program for the coming year.

“Hopefully, we’ll be able to refine those numbers in the not-too-distant future now that we’ll soon know what the actual enrollment, at least to receive a full-year scholarship, will be going forward,” Shirley said.

Changes at the federal level also are likely to affect state finances, according to Shirley. Those include proposed changes to the federal tax code as well as changes to provider taxes and changes to Medicaid and the Supplemental Nutrition Assistance Program.