West Virginia’s Public Employees Insurance Agency (PEIA) faces chronic financial instability, serving over 200,000 public employees and retirees through a system requiring repeated legislative bailouts due to uncontrolled cost growth, limited operational flexibility, and mounting taxpayer risk.
The following brief proposes market-based reforms, including Health Savings Accounts paired with high-deductible plans, reference pricing to foster provider competition, private insurance options through defined-contribution models, and a legislative fix to establish maximum reimbursement rates. These solutions can transform PEIA from an unsustainable defined-benefit system into a competitive, employee-empowering model that controls costs while reducing taxpayer risk by moving beyond short-term political fixes to address fundamental structural challenges through proven market mechanisms.