by The Associated Press

CHARLESTON, W.Va. -- West Virginia's health care program for public employees will set a future course for retiree benefits after fielding public comments at statewide hearings expected later this month, officials said Thursday.

The finance board of the Public Employees Insurance Agency had voted in May to stop subsidizing retirement premiums, starting with 2010 hires.

It also decided to transfer current retirees back into the agency's main program, if it can't continue its Medicare Advantage plan, but without restoring the $22 cut from their monthly premiums when that plan began in 2006.

An outcry over ending the subsidies prompted Thursday's meeting. The board elected to reach final decisions only after fielding public comments.

It tentatively set public hearings for June 22 in Beckley, June 23 in Martinsburg, June 29 in Charleston and June 30 in Wheeling. The board's next meeting is July 30.

But Chairman Rob Ferguson also said the board was stopping short of rescinding either of May's moves. He cited the growing gap between on-hand assets and promised "other post-employment benefits' fueling the desire to end subsidies.

National accounting standards require public employers to calculate these OPEB liabilities, which mostly reflect retiree health care costs. While Medicare Advantage had helped pare down the state's estimated liability, its expected demise puts the figure at $7.8 billion for the budget year that begins July 1.

A private insurer has managed Medicare Advantage, but imminent cuts in reimbursement rates has led it to quit the market at the end of the year. PEIA has projected that absent any changes, the OPEB unfunded liability will more than double by 2030 to $18 billion, Director Ted Cheatham said.

"Understand that the mission of the finance board is financial stability,' Ferguson told fellow board members and a public audience of around two dozen. "If there's another way to do it, I think that's why we're going to out for public comment.'

Gov. Joe Manchin later echoed Ferguson, his administration secretary.

"West Virginia's OPEB liability is something that is going to affect our children and grandchildren, and it's important for the public to know and understand it,' Manchin said in a statement. "I applaud the PEIA Finance Board for its responsible decision today as they continue to look out for the best interests of our retirees and current employees, as well as taxpayers.'

But some of those attending Thursday's meeting questioned whether the issue boiled down to an either-or choice.

They included Ernie "Spud' Terry, president of the state retiree chapter of AFSCME, the union that represents government workers.

"We were public servants for 40, 45, 50 years,' Terry said. "And all that time, we were taxpayers.'

West Virginia is among 29 states that subsidize retiree premiums, according to a 2008 survey by the Washington, D.C.,-based Center for State and Local Government Excellence. Because medical inflation has eroded the value of the retirees' share, the state's subsidy now covers about 72 percent of their health care costs.

Just five states have taken the route proposed in May by the PEIA board and require the full premium from their retirees, the survey found.

Another 15 states cover that premium entirely, including neighboring Maryland, Ohio and Pennsylvania, though the latter has moved to reduce that subsidy for future retirees.

Both the American Federation of Teachers-West Virginia and the state Education Association had considered suing over the May vote, questioning whether it was proper for what was scheduled as an emergency meeting. Officials from both groups thanked the board at Thursday's meeting for setting public hearings. They also urged members to consider any alternative proposals that might emerge from them.

With lagging state pay levels, particularly when compared to surrounding states, they argue that ending retiree benefits weakens efforts to attract and keep good educators.

House Majority Whip Mike Caputo, D-Marion, had also criticized ending the subsidies. He quoted to the board what his son, a teacher seeking a full-time slot in the state, said upon learning of May's decision: "Why in the hell would I stay in West Virginia and teach?'

Other family members had reacted similar to the prospect of ending the premium breaks, he said.

"We have a government to run, and we need quality people to run that government,' said Caputo, a United Mine Workers union official. "We're going to have a damn difficult time recruiting the people we need to move our state forward.'