WV Public Employee Health Care Costs Have Risen Nearly $1,000
At the root of the school employee strike is the growing cost of health care under the WV Public Employees Insurance Agency or PEIA. Over the last several years, the state had underfunded PEIA due to its inability to deal with the state's long-standing revenue problems that stem from major tax cuts enacted over the last decade. While much attention has focused on the fact that West Virginia ranks 48th in average teacher pay, what is lesser known is the increase in health care costs for school workers over the last several years.
Since 2016, the state has shifted costs onto public employees not only through higher premiums but also large increases in out-of-pocket spending. For example, from 2016 to 2018, the typical teacher with an average pay of about $45,500 with two kids and a spouse (Family Plan), have seen their premiums increase by an estimated $348 annually, while out-of-pocket expenses (co-pays, deductibles, and coinsurance) have grown by $610. Altogether, the average teacher with a family of four on PEIA has seen their PEIA costs increase by $958 annually from 2016 to 2018. Meanwhile, the starting salary for teachers in West Virginia has increased by only $50, from $33,665 to $33,715. For school service personnel, with an average salary of about $27,500, the total increase in PEIA costs was $946 over the last three years.
For the average teacher with a salary of $45,500 on the PEIA Family Plan (Family PPB Plan A), their monthly premium has increased from $312 per month to $341 per month. This is an annual increase of $348 from 2016 to 2018. For a school service worker with an average salary of about $27,500 in this same PEIA plan (Family PPB Plan A), their premium has grown from $206 to $234 per month or by a total of $336 annually from 2016 to 2018. For those on the Family PPB Plan A who make $45,500, their annual deductibles have grown from $550 in FY 2016 to $950 in FY 2018. Meanwhile, for the same family the annual out-of-pocket maximum has grown by $2,000, from $3,500 in FY 2016 to $5,500 in FY 2018.
Based on data from PEIA, the total average out-of-pocket expenses per member (e.g. 1 employee, 1 spouse, 2 children = 4 members) have grown from $852 in FY 2016 to $1,004 in FY 2018 - an increase of $153. For a family of four, this is an increase of $610 from 2016 to 2018. Out-of-pocket expenses include annual deductibles, co-pays, coinsurance, and Rx drug co-pays.
With the slow growth in public employee salaries being gobbled up by rising PEIA health care costs, it is clear why so many our of state’s public sector workers are striking. To fix PEIA it will require additional revenue, such as raising the state's natural gas severance tax, and it will take action to control the growing health care costs at the state and national level.
* Special thanks to Cathy Kunkle who helped out with the data for this blog post!