CHARLESTON, W.Va. - All efforts will be made to minimize rate increases or benefit cuts for state employees covered by the Public Employees Insurance Agency, the director said Tuesday.

This fall, the PEIA Finance Board will look at changes after medical claims for active employees jumped more than $35 million in the recently ended 2007-08 budget year, Director Ted Cheatham said.

"We've got a lot to look at to do our best to mitigate the impact to employees of West Virginia," he said.

Cheatham said PEIA experienced unexpected increases in medical claims in the budget year, as well as cost increases driven by advances in technology and changes in standards of care.

He said one of those changes is in imaging systems, where patients are more likely to undergo MRI scans rather than cheaper but less conclusive X-rays.

He said, as with any health insurance plan, it is difficult to precisely project patient utilization 18 months in advance.

"We just had what they call in the industry a bad year," Cheatham said.

While the plan for active employees had higher-than-projected costs, he noted that the Medicare Advantage plan - established last year to provide coverage for about 37,000 retired public employees and teachers - had lower-than-expected costs for the budget year.

"It's right on track. That's why we went to Medicare Advantage," he said.

Cheatham said if the PEIA plan for active employees and the Medicare Advantage plan were looked at as a single company, PEIA actually had cost savings of $8.5 million, compared to 2006-07.

He said the Finance Board will work to minimize any premium increases this fall - increases that will take effect on July 1, 2009, marking three years between premium increases for PEIA insurees.

Reach Phil Kabler at ph...@wvgazette.com">ph...@wvgazette.com or 348-1220.

CHARLESTON, W.Va. - All efforts will be made to minimize rate increases or benefit cuts for state employees covered by the Public Employees Insurance Agency, the director said Tuesday.

This fall, the PEIA Finance Board will look at changes after medical claims for active employees jumped more than $35 million in the recently ended 2007-08 budget year, Director Ted Cheatham said.

"We've got a lot to look at to do our best to mitigate the impact to employees of West Virginia," he said.

Cheatham said PEIA experienced unexpected increases in medical claims in the budget year, as well as cost increases driven by advances in technology and changes in standards of care.

He said one of those changes is in imaging systems, where patients are more likely to undergo MRI scans rather than cheaper but less conclusive X-rays.

He said, as with any health insurance plan, it is difficult to precisely project patient utilization 18 months in advance.

"We just had what they call in the industry a bad year," Cheatham said.

While the plan for active employees had higher-than-projected costs, he noted that the Medicare Advantage plan - established last year to provide coverage for about 37,000 retired public employees and teachers - had lower-than-expected costs for the budget year.

"It's right on track. That's why we went to Medicare Advantage," he said.

Cheatham said if the PEIA plan for active employees and the Medicare Advantage plan were looked at as a single company, PEIA actually had cost savings of $8.5 million, compared to 2006-07.

He said the Finance Board will work to minimize any premium increases this fall - increases that will take effect on July 1, 2009, marking three years between premium increases for PEIA insurees.

Reach Phil Kabler at ph...@wvgazette.com">ph...@wvgazette.com or 348-1220.