Delaware’s General Assembly will hold a special session later this month to vote on a bill addressing concerns about the state’s transition to a Medicare Advantage Plans for retired state employees.
The legislation — sponsored by leadership from both parties in the Senate and House — would task the state’s Department of Human Resources with assisting state pensioners with the transition and add guardrails to the new insurance plans for retired state employees.
It comes after a lawsuit by the retiree advocacy group RiseDelaware over the new plan and the process behind the change.
Medicare Advantage Plans give Highmark Delaware greater control over coverage decisions in exchange for the company assuming the growing financial risk of insuring the growing number of state pensioners.
This year, Delaware expects to spend $785 million to keep its retiree healthcare program solvent. But State Rep. John Kowalko (D-Newark South) and other critics say the transition amounts to the privatization of that program – a shift that brings an increased risk of coverage denials and fewer opportunities to find healthcare out-of-state. Critics also argue that Delaware's State Employee Benefits Committee was not sufficiently transparent when planning the switch, claiming that retirees and lawmakers were left unaware of the potential changes to healthcare plans until it was too late.
The bill before the General Assembly attempts to remedy some of those concerns, including by requiring Highmark Delaware to provide quarterly reports on coverage denials and by creating an ombudsman position within the Delaware Department of Human Resources to assist retirees during the transition. The legislature previously pushed Highmark Delaware to agree to delay implementation of preauthorization requirements for some care — the core reason for an increase risk of coverage denials — by four months.
Senate Minority Whip Brian Pettyjohn (R-Georgetown) says the process has also been a reminder that the state needs to be more careful in how it engages the public in decision-making.
“In September, our caucus organized two town halls providing the opportunity for state pensioners and administration officials to come together and have questions answered about the new Medicare Advantage plan,” he said. “One thing became very clear: Retirees need a seat at the table for this and future decisions regarding their health coverage. They dedicated their careers to serving Delawareans and we must do what we can to ensure their retirement healthcare is the best it can be.”
House Speaker Peter Schwartzkopf (D-Rehoboth Beach) asserts that the bill was the best way the legislature could respond to retirees' concerns. "We were able to win several concessions that will improve the current deal for retirees," he said. "And after several conversations and negotiations, we have crafted a bill that will add several layers of oversight to the process to protect the current agreement and assist retirees during this transition.”
But Kowalko remains critical of the bill, arguing that his fellow lawmakers ignored his calls for the legislature to intervene before the state finalized its contract with Highmark Delaware earlier this month. He also argues the state can find other funding sources to cover the rising cost of insuring retired state employees.
“We can not hold the expenses of growing healthcare on the retirees themselves," he said. Kowalko pointed to an array of other options — including adding two new tax brackets for high-earning Delawareans or redirecting millions of dollars from the state's prosperity partnerships program to help fund retiree healthcare — that he believes could be better responses to financial pressures.
Lawmakers take up the bill in a special session October 26th. The transition to Medicare Advantage comes in January.
