STAFF WRITER
Two managed-care executives said Monday that higher deductiblesand co-pays for public employees won't be enough to control costsforthe state Public Employees Insurance Agency.
Meanwhile, Senate Finance Chairman Oshel Craigo wants tostabilizePEIA by letting small businesses into the agency's insurance pool.PEIA officials have projected next fiscal year's deficit at $48.5million.Gov. Cecil Underwood included $10.7 million in his proposedbudget. As for the rest, the PEIA Finance Board has adopted a planthat raises deductibles and co-pays to discourage public employeesfrom using PEIA services as often.Paul Holdren, president and chief executive officer of Prime One,told a joint House-Senate PEIA subcommittee that the higherdeductibles and co-pays don't go far enough.'We have a situation where it has become very convenient forpeople to use the emergency room,' Holdren said.He said the national average for emergency room visits was 380visits per 1,000 people, but West Virginia's was 579.4 visits per1,000.Information distributed by PEIA Director Bob Ayers showedMonongalia County had 273 emergency room visits per 1,000 PEIAenrollees and Harrison County had 238.Usually, rural counties are expected to have a higher emergencyroom utilization rate, but the two urban counties ranked amongcounties with the highest rates.Prime One has lost $15 million on its PEIA business the last threeyears, Holdren said. PEIA is 48 percent of Prime One's business.'In reality we have people using health care inappropriately,' hesaid. 'The system needs an overhauling.'Both Holdren and Phil Wright, president and chief executiveofficer of The Health Plan in the Upper Ohio Valley, said PEIAneededto continue to have both managed care and an indemnity or fee-for-service plan.The higher deductibles and co-pays will apply to public employeeswho are enrolled in PEIA's indemnity or fee-for-service plan. Mostof the employees are in the indemnity plan.Ayers said PEIA needs to have a steady funding source that willincrease year to year.He said premiums are going to have to increase gradually for bothemployees and employers. A 7 percent premium increase would raisecurrent premiums by $2.80 a month, he said.The PEIA Finance Board would have to approve the premium increase.Craigo, D-Putnam, said high utilization and prescription drugcosts are the two biggest PEIA cost items. One way to reduceunnecessary emergency room utilization, he said, would be to levy apenalty if patients went to the emergency room in a non-emergencysituation.Craigo also suggested allowing small businesses to join the PEIA'sinsurance pool. 'It's clear to me we need to expand the base,' hesaid after the subcommittee's meeting.He said small businesses would pay 100 percent of their costs.Many small businesses are owned by young people, he said, who can'tafford insurance.A similar suggestion was made several years ago, but was rejectedby the Legislature.Ayers cautioned the subcommittee that any proposal to bring insmall businesses would have to be carefully structured.To contact staff writer Fanny Seiler call 348-5198.
