Delaware’s State Employee Benefits Committee is considering yet another step to rein in the state’s health care spending deficit: raising health insurance premiums for state pensioners.
The Committee voted to increase monthly premiums for active and pre-65 retired state employees by more than nine percent in March. But it did not raise premiums for state pensioners amid an ongoing legal battle over their earlier effort to transition pensioners to from their current health care plan — known as Medicfill — to a so-called Medicare Advantage Plan, which would have given the state's insurance provider, Highmark Delaware, greater control over coverage in exchange for assuming some of the state's liability.
Now, faced with a $38 million deficit that may double over the next two years, the Committee is considering whether to extend that rate increase to pensioners as well.
During a Committee discussion Monday, pensioner advocates argued they should receive no rate increase, given that they — unlike active employees and retirees younger than 65 — generate a premium surplus for the state.
“This increase – to me – makes no sense, and it’s grossly unfair to Medicare retirees, who should not be expected to subsidize the expenses of pre-Medicare retirees," said Retired state Sen. Karen Peterson, one of the plaintiffs in a lawsuit challenging the switch to Medicare Advantage plans.
Human Resources Secretary Claire DeMatteis pushed back, asserting that leaving premiums unchanged for pensioners would mean higher rate increases for active employees.
“When those pensioners were active employees and pre-Medicare retirees, they benefited from this group approach," she said. "And we’re not going to start now with peeling off by population. That’s not fair.”
The Committee members were presented with three options: raising the rates for pensioners by more than nine percent, leaving them unchanged, or splitting the difference with a five percent increase.
Insurance Commissioner Trinidad Navarro told the committee that he favors the five percent option, which he sees as a fair middle ground. But DeMatteis underscored that the compromise would mean adding $4 million to the state's health care deficit when compared to the nine percent increase.
Ultimately, the Committee voted unanimously for the five percent increase, effective January 1, 2024.
