West Virginia Press Association Staff Report
CHARLESTON, W.Va. – The Legislature’s Joint Committee on Insurance and PEIA, on Tuesday, heard a presentation from Jeff Knight, president and CEO of The Health Plan, regarding their coverage options available through PEIA (Public Employees Insurance Agency).
“We are a West Virginia-based health insurance company,” Knight said, explaining what The Health Plan is. “We’re one of three managed-care organizations who manage the Medicaid business here in West Virginia. Something that a lot of people don’t know is we’re also a PEIA option.”
Joining Knight was The Health Plan Senior Vice President of Sales Ryan Jewell, who said that, “When most people think of PEIA, they think of the self-insured option, but there is a fully insured managed care option.”
According to Jewell, The Health Plan has partnered with PEIA for more than 30 years, and served as the only managed care option since 2011. Currently, over 14,000 members of PEIA are enrolled with The Health Plan.
“PEIA also works with some other independent vendors for vision coverage, and other ancillary benefits as well,” Jewell noted. “Employees of the state have options to choose some additional ancillary benefits.”
The majority of The Health Plan’s membership, Jewell explained, is in the north-central part of West Virginia, adding, “We do have a respectable population in Kanawha County.”
“The self-funded option (for PEIA members) is administered by a company called UMR – United Medical Resources,” Jewell said. “The way that UMR works with PEIA is that the state is charged an administrative fee, on a per employee per month basis. The state is then responsible for any of the claims.”
“The Health Plan is a little bit different,” Jewell continued. “We charge a set premium – or a ‘capitation rate’ – to the state, and The Health Plan is responsible for all the claims that occur. The Health Plan can either make money or lose money based off of that capitation rate that the state is charged.”
“That’s why there are two differences,” Jewell added. “You have significantly more variable costs with the self-funded option, and you have fixed costs with The Health Plan.”
As outlined in the PEIA fiscal year 2023 financial report, employee premiums through The Health Plan are approximately $8 higher per month than they are with UMR. However, the cost to the state averages $176 more per month, per employee. If every member selected The Health Plan in 2024, the report shows, the savings to the state would total $122.4 million.
At the conclusion of the presentation, Sen. Charles Clements, R-Wetzel, said, “I’m noticing on the plan here you have a deductible and out-of-pocket max.”
“Does that apply to your drug benefits also, or is that just for the medical?” Clements asked.
“The deductible is just for the medical benefits,” Jewell replied. “The out-of-pocket maximum would encapsulate the pharmacy piece as well. There’s no deductible that would be applied to prescription drugs.”
Del. David Green, R-McDowell, then asked, “If you were able to get more of the state’s population into the PEIA plan, would you be able to go to the providers and negotiate a better rate potentially to lower the overall cost, which would then help everybody?”
“That’s typically how the insurance world outside of PEIA works,” Jewell said. “The legislature passed last year to pay 110% of Medicare as a reimbursement rate. That is a state-set rate that the hospitals receive. Unless there was something done from a legislative approach, that would be the fee schedule that would be applied.”
The Joint Standing Committee on Insurance and PEIA will meet again during next month’s Interim Legislative Session, scheduled for May 19 through 21.