Even when she was in college, Katie Surface knew that she wanted to become a teacher. And for the past 13 years, she’s been doing just that, working in classrooms in Wyoming and Raleigh counties.
But despite education always being where she wanted to build a career, Surface has faced financial difficulties doing the job she loves. As a mom of two young children, she and her husband, who’s also a teacher, have been working to cut as many expenses as they can to help pay for child care.
They’ve changed cars and are looking into getting cheaper car insurance. They’re also looking for a different internet provider.
“You name it and we’re trying to do it, to trim the fat,” Surface said.
With rising costs, Surface’s family needs more money. But instead, the 36-year old teacher’s next pay raise will largely go towards health insurance, the result of West Virginia legislators’ efforts to stabilize the struggling Public Employees Insurance Agency during the recent 2023 session.
The agency, which provides health insurance to more than 200,000 public employees and also covers many of their spouses and dependents, has faced an increasingly perilous budget cliff in recent years amid medical inflation and other increased costs. Lawmakers responded this year by making a range of changes to the program. Taken together, the move will cause PEIA premiums for employees — frozen by Gov. Jim Justice since 2018 — to go up as much as 24.2% in July.
That change will soon be adapted into a new financial plan for PEIA, which is preparing to take a trio of reworked insurance options on a public tour this week. The possible plans include different combinations of premium increases, raised deductibles and copays, and higher prescription drug costs.
As legislators tackled the PEIA changes, the prevailing argument was that with the agency in such a dire state, drastic measures were needed to save PEIA and ensure that public employees had any insurance to access at all. They said other bills raising state employee salaries by $2,300 and a newly passed income tax cut will be enough to offset the pain of the sudden premium increase.
“We now have as close to a permanent fix to PEIA that we haven’t had in the past,” Justice said when signing the PEIA bill earlier this month.
But that argument rings hollow for many public employees, who argue lawmakers touting the success of the PEIA bill are overlooking the difficult financial situation many public employees were in even before increased insurance costs became a factor. And after years of inaction, there is considerable frustration that the Legislature’s most comprehensive move on PEIA since 2018 doesn’t address longstanding issues public employees have had, but instead adds more costs.
For Surface, the weight of those costs is becoming crushing.
“When I signed my contract I was under the understanding that we had a lower pay but we had these more impressive perks,” she said. “And as time progresses we are without our perks and without our pay.”
‘Don’t just hit us all at once.’
While the struggles of PEIA are far from new, the nine-school day teachers strike in 2018 brought a new dimension to frustrations about the agency. And that’s largely due to the fact that the strike was resolved not with permanent changes to stabilize PEIA, but instead with a promise from the governor to look for solutions.
The result has been that PEIA insurance has effectively been frozen for half a decade. And while a task force made recommendations about how to better stabilize the agency, officials didn’t act on those recommendations. Instead, Justice opted to make several one-time revenue transfers from the PEIA Rainy Day Fund.
But now that the agency is finally facing a thaw that had been delayed for years, public employees are dismayed that rather than improved coverage or increased benefits, they are being handed higher bills. The new changes will raise the reimbursement rate for medical providers — a move that will undoubtedly help providers continue to accept PEIA coverage. But the measure also requires spouses eligible for other insurance to pay to be on a PEIA plan.
The most significant immediate change for those on PEIA insurance is that the state will also return to an 80/20 split in insurance costs between employers and employees, a ratio that has been set in state code. Legislators said that because premiums had been frozen for so long, the state was taking on an increasing share of costs, putting the ratio closer to 83/17 in recent years.
That adjustment will lead to an immediate increase in costs for employees. And with the shift back happening all at once, there’s worry that the changes will fall on two particular groups the hardest: new employees who bring home lower salaries as they start out, and those who will now need to have their spouses buy-in to PEIA because they are eligible for other insurance.
Sherri Talkington has worked as a teachers aide in Harrison County for more than two decades and falls into the latter group. She’ll be adding a spouse to her insurance; that in addition to the other changes will nearly double what she pays for her coverage. She estimates that the new costs alone will come close to $2,500 a year, more than the public employee pay raise.
“The raise that they’re proposing is still going to leave me in the hole,” Talkington, who also serves as president of the West Virginia School Service Personnel Association, said in the days before the House of Delegates voted on the bill.
It’s a counter to arguments some legislators have made about the PEIA premium hikes, namely that when the pay raise, income tax cuts, and additional tax credits are taken into account, these measures create enough of a cushion to fully absorb the increased insurance costs. But employees and advocates say that those arguments don’t account for the possibility of future premium increases and dismiss the fact that employees also need raises to address costs of living and the increased pain of inflation in their daily lives.
“They could slowly do this,” Talkington said. “We know we have to have some skin in the game, we know that. But don’t just hit us all at once.”
Employees say that premiums aren’t the only insurance cost going up
Employee concerns about the PEIA changes came to a head earlier this month as the House of Delegates prepared to vote on the bill. On a rainy Saturday morning, a small group of employees from various counties huddled underneath the public entrance to the state Capitol, waiting for the building to be unlocked.
The group was mostly teachers, though other current and former employees from state agencies were also present. As they waited, several criticized the proposed PEIA changes, saying that it has been difficult to square the state’s argument that it cannot afford to find more money for PEIA with some of the economic development deals legislators supported during the session.
“If they can dump $300 million into that Form Energy, and give our taxpayer money away, they can shore us up,” one man said as he began moving through security.
As she walked into the Capitol, Chrystalle Doyle agreed. Doyle, a teacher for more than three decades who currently works as a technology coordinator for the Mason County school system, said the insurance changes will be difficult for her and her family.
“My insurance is one of the largest expenses that comes out of my check, and the copays and deductibles are high,” she said. Her husband is also eligible for PEIA, but has been covered under her plan. Doyle says that her family has various medical expenses, including different medications for her and one of her daughters. She says that the cost of medications have continued to go up in recent years, an example of how even with the premium freeze PEIA’s insurance costs have continued to increase.
Those costs are projected to increase even more under two of PEIA’s new benefit proposals, which recommend significant increases in copays, deductibles, and prescription drug costs to help reduce a surge in premiums.
It’s made carrying family insurance harder, just one part of a larger shift Doyle has seen over the years.
“For years they didn’t give us pay raises, they’d just boost the insurance,” she said. “But then they forgot that it was compensation that they gave us and now they’re like ‘we can’t afford this anymore’.” Shortly after, Doyle joined other public employees in one of the galleries above the floor of the House of Delegates chamber.
More than three and a half hours later, after a long and at times tense debate between legislators, she was watching as lawmakers voted 69-27 to pass the bill.
As insurance costs go up, some employees face an uncertain future
With the PEIA legislation finalized, Republican leadership in the state Legislature argue that they have successfully completed a “three-legged stool” of important and interconnected legislation — PEIA solvency, income tax cuts, and pay raises — that will ultimately leave both the state and public employees in a better financial position than they were at the start of the year.
“When you sum all of those things together, today should be a very good day for every West Virginian,” House Speaker Roger Hanshaw, R-Clay, told reporters shortly after the PEIA bill passed the House of Delegates.
“These bills absolutely work together,” he added.
But the combined impact of these bills may not turn out as legislators intend them to. The majority of state workers fall into lower to middle income tax tiers, meaning that they will not see as much benefit from the income tax cuts as higher earners and businesses. And even in cases where the pay raises, tax cuts, and additional tax credits are enough to cover the premium increase, it means that workers will have to use the extra money to prioritize paying for their insurance over other expenses, blunting some of the increased consumer spending that the tax cuts are supposed to facilitate.
But in many ways, the impacts of the legislation go past finances, also adding to a sense of frustration and disappointment public employees have long expressed about compensation and how their work is valued by the state.
“It’s frustrating and it’s insulting,” said Elliott Kendle, a Wetzel County elementary school teacher who has been working in the state for more than three decades.
In recent years Kendle has relied on his insurance to help with a number of medical expenses, including a colon cancer diagnosis and treatment that has racked up more than $1.4 million dollars in medical costs. Even in its reduced form of the past several years, his PEIA insurance has helped, particularly as he has had multiple surgeries out of state.
But after some of the changes made during the session, and the release of the new PEIA plan proposals, Kendle is worried about what his care will look like in the future.
“I’m very concerned about the effect this will have on all of us,” he said. “ None of the options are good, and the changes are going to hit people very hard. People were concerned about premium increases but the proposed increases to deductibles, out-of-pockets, and prescription drug costs could also force people to make some tough choices that they should not have to make.”
These are issues that teachers and other public employees will face in the coming months as more information is released about exactly how the proposed PEIA plan changes will affect them.
But even without that information, employees say that they are being put in an increasingly difficult position.
“At some point it has to be about what is best for me and my family,” said Surface, the Raleigh County teacher. “And there’s not any more corners we can cut.”