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Gov. Carney vetoes bill aiming to increase transparency within state retiree healthcare decisions, House overturns it

Delaware Legislative Hall
Delaware Public Media
Delaware Legislative Hall

This story has been updated.

Gov. John Carney vetoes a bill aiming to increase transparency with how state retiree healthcare plan decisions are made — the House overturned the veto unanimously on Wednesday with one member absent.

House Bill 282, championed by State Rep. Paul Baumbach (D-Newark), would provide extra regulatory and transparency processes to the State Employee Benefits Committee (SEBC) — the body in-charge of choosing state health insurance plans — and their meetings.

In a statement released on Tuesday, Carney wrote:

"Simply put, healthcare benefit costs for the State, its employees and retirees are rising at unsustainable rates. Working together, this General Assembly and my Administration are taking serious steps to address this problem. House Bills 330, 350, 375 and 376 as a package build on that important work."

"Unfortunately, HB 282 runs counter to those efforts. The legislation would do nothing to rein in healthcare costs. Indeed, it will make solving these problems more difficult. Over the long term, these changes will likely lead to higher taxes, reduced state services, or a greater cost burden on active state employees, including teachers, law enforcement officers and other public servants. That is unacceptable."

HB 282 and its companion bills were introduced following a lawsuit brought by retiree advocacy group RISE Delaware in 2022, alleging the state failed to follow administrative procedures by switching to Medicare Advantage without state retirees' input. In October, a judge issued a temporary stay, blocking the state's ability to proceed with Medicare Advantage.

The bill would restructure the SEBC to remove the controller general as a voting member of the committee and remove the Department of Human Resources secretary as co-chair of the committee — it would leave the director of the Office of Management and Budget as the sole chair.

It would also add more state pensioners as voting members of the body.

In his statement, Carney expresses concerns with the removal of the controller general as a voting member and adding more state pensioners: "Unlike the State leaders that would be removed from the SEBC under this bill, even a-well-intended appointee under HB 282 would have no obligation to protect and secure the State's overall fiscal health. In fact, they would have every incentive to oppose any proposal that might negatively impact their personal interests," he wrote.

Baumbach disagrees with Carney, noting the controller general herself asked to be removed as a voting member.

“She said, ‘I have a lot on my plate and really – I tell you where the money is, I don’t want to tell you where the money should go. That’s someone else’s job.’ So she said, ‘please, please take me out of that.’ So we listened to that," Baumbach said.

He also argues more retiree voices should be included in their healthcare plan decision process.

“I have a different viewpoint than the governor does on how the SEBC does work and should work, and I think that having more stakeholders who are eating the cooking gets a better dinner, and I think it’s much better to have people at the table than on the menu.”

The bill would also require the secretary of the Department of Human Resources to communicate to state employees and state pensioners of any additions or changes in benefits coverages as well as any proposed additions or changes in benefits coverages.

Additionally, the SEBC would be required to provide the meaningful opportunity for public comment before voting on plan changes.

"The State's active employees and retirees are appropriately apprehensive about the potential for increases in their healthcare costs, reduced benefits or both. The responsible way to address this problem going forward — as this General Assembly has so diligently worked to do — is to foster mechanisms that combat unrestrained growth of healthcare costs and to further increase funding to the Other Post-Employment Benefits (OPEB) Trust Fund, not to interfere with the work of the SEBC," Carney wrote.

HB 282 passed both the House and Senate with unanimous support earlier this year.

Carney signaled support for four other bills in the package, but on Wednesday, he let House Bill 281 enact without his signature, which repeals the option of providing health care insurance to current state pensioners under a Medicare Advantage plan.

In a statement released Wednesday, RISE Delaware President Lisa Diller said: “The passage of House Bill 281 guarantees employees and retirees that they will get the benefits they were promised. We are grateful to Lt. Gov. Bethany Hall-Long, Rep. Paul Baumbach, and Sen. Bryan Townsend for their leadership on behalf of the State’s retirees."

“This is a great victory for Delaware’s retirees and it just goes to show that you can ‘fight City Hall’ and win,” added retired State Sen. Karen Peterson, Legislative Liaison for RISE Delaware and plaintiff in the retirees’ lawsuit.

The House voted to overturn the veto of HB 282 unanimously with one member absent — it's the first veto overturn in the General Assembly in 47 years.

It now heads to the Senate where a three-fifths vote would officially codify the bill.

Before residing in Dover, Delaware, Sarah Petrowich moved around the country with her family, spending eight years in Fairbanks, Alaska, 10 years in Carbondale, Illinois and four years in Indianapolis, Indiana. She graduated from the University of Missouri in 2023 with a dual degree in Journalism and Political Science.
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