By Stephen Smoot
As the calendar year draws to a close, representatives of the West Virginia Education Association and American Federation of Teachers have traveled more than Santa’s reindeer, trying to get all 55 county school boards and superintendents to support a resolution to fix the Public Employees Insurance Agency’s latest crisis.
Resolutions in hand, they will go to Charleston, present them to Governor Patrick Morrisey, Senate President Randy Smith, House of Delegates Speaker Roger Hanshaw, and others as earnest evidence of the need to address the proposed 14 percent hikes and other significant increases that could come to all state workers insured under the plan.
As much as the WVEA and others would like to cast their blame on Charleston, PEIA’s woes come not from state level mismanagement, but the ongoing incompetence of federal government legislation and policy.
PEIA is an insurance company, albeit one hampered by the fact that its operations are inescapably tied to politics and the health of State finances. It, like United Healthcare and other insurance companies, are stuck with a myriad of federal interventions that consistently drive up prices, reduce efficiencies in health care, and create problems for those who need it.
First of all, Charleston did not create the latest scourge of inflation by infusing endless amounts of cash into the nation’s economy. The Biden Administration either did not understand or care that inflation, at its heart, is “too many dollars chasing too few goods” and continued to dump dollars.
Although no one on either side said it explicitly, Democratic led administrations have often historically seen inflation as a way to undercut banks and other creditors by reducing the value of the debt they hold – and also the value of payments made by debtors on that debt.
In any event, inflation drove up the cost of inputs into health care just like every other industry.
But what of Biden’s ballyhooed Inflation Reduction Act?
This legislation, which all admit now made inflation worse in most sectors, also retooled parts of Medicare. The Council for Affordable Health Coverage stated that “the IRA’s redesign of (Medicare) Part D is increasing premiums, reducing competition and choice, and raising out-of-pocket costs.” PEIA itself said that “substantial increases in Medicare Advantage” pushed costs higher for them and others.
In 2021, the Heritage Foundation released a study showing how and why Obamacare “has doubled the cost of individual health insurance.” Just like the “Inflation Reduction Act” actually made prices rise, the “Affordable Care Act” was a disaster in terms of driving up premiums for everyone.
In 2013, the average monthly premium in the United States was $244. Six years later, it skyrocketed to $468 and today, the government reports an average of $477 per month. Premiums rose an average of six percent in 2024 and may rise as much as seven percent next year.
West Virginia, according to the Heritage Foundation, saw average monthly premiums paid per member per month in the individual market rise much higher – from $261 in 2013 to $894 in 2019. These numbers reflect the total paid by employee and employer, not just the employee.
At the same time, Obamacare drove the small private practices, care clinics, and hospitals into either merging or going out of business. A huge slate of mandates added a number of administrative requirements that had little or nothing to do with care, but drove up costs considerably.
The rise of massive health care “systems” reduced competition and contributed to the rise in prices.
Many tout the alleged benefits of single payer systems such as the National Health System in Britain, but the Associated Press reported earlier this year that 52 percent in that country are dissatisfied. In June, a British Broadcasting Corporation headline read “Why is no-one talking about NHS systemic failure?”
Quality and access to care in the “free” system have continually declined over the long term.
One does not have to go far to see what a single payer system, like the NHS, would look like in the United States. The Veterans’ Administration hospital system is one of the largest such systems in the world. It outperforms the NHS, solely because those who work there tend to care deeply about veterans, but not well enough to satisfy its customer base at all because government run businesses are inherently unable to operate well.
While those who call for an American single payer system say “Medicare for All,” the result would come closer to “VA for All.”
Problems facing PEIA and its customers are serious and significant, but it should be understood that the State cannot help all of the blundering policies thrust upon health care by the federal government.
The long term fix for the customers of PEIA and all other insurance providers comes from repealing and replacing Obamacare. Until then, the West Virginia Legislature only has limited and very temporary means to mitigate the premium and fee increases seen all over the nation.
