Bay to Bay News | by Joseph Edelen
State of Delaware pensioners who are eligible for Medicare will have their coverage transitioned into a new, customized Medicare Advantage Plan starting Jan. 1, 2023.
After a diligent bidding process, Highmark Blue Cross Blue Shield Delaware was awarded a three-year contract in February to administer the change. The Freedom Blue PPO Medicare Advantage Plan, which would replace the Medicfill Medicare Supplement Plan, is the product of years of work by committees aiming to provide quality coverage while reducing Delaware’s $10 billion unfunded liability for state retirees’ health care.
Despite the change in plans, Claire DeMatteis, secretary of the Department of Human Resources and State Employee Benefits Committee co-chair, said the move to a Medicare Advantage Plan will provide more value for the over 28,000 pensioners in the state.
“It’s the same coverage. It’s the same doctors, it’s the same hospitals, it’s the same prescription drug services,” Ms. DeMatteis said. “We worked very hard with Highmark to make sure that the Medicare Advantage Plan mirrored the Medicare Supplement Plan. That was really important to us.”
Like the current Medicfill Supplement Plan, the state’s new plan will include no deductible for medical services, no co-pay for doctor visits, full and immediate coverage for pensioners with pre-existing conditions, and no cost for nursing facility services, lab visits or imaging, or emergency room and urgent care visits. In addition to these benefits, the new plan will include access to the SilverSneakers fitness program, assistance in access to preventative and chronic care management for impacted retirees, and an at-home meal service for those released from a hospital stay.
Ms. DeMatteis said the change will cut pensioners’ monthly premiums by more than half. Under the current Medicfill Supplemental Plan with subscription, pensioners pay a premium of $459.38, while the new Medicare Advantage Plan will prompt a $216.18 premium. Ms. DeMatteis said the premium for state retirees who retired on or before July 1, 2012, will remain $0, and those who retired after will pay a $10.80 monthly premium.
The state’s new Medicare Advantage Plan was considered throughout a “very public process,” according to Ms. DeMatteis. Since September 2019, the state’s Retirement Benefit Study Committee has evaluated unfunded retiree health care liabilities and conducted 12 public meetings regarding potential solutions.
Retiring Rep. John Kowalko, D-Newark, has expressed concerns with the change in coverage, citing a lack of transparency in the process and uncertainty that the move represents the privatization of Medicare. He claimed the proposal was hidden in the budget process to “assure its passage with minimal scrutiny by legislators and/or the public.” Rep. Kowalko has urged Ms. DeMatteis, the Retirement Benefit Study Committee, members of the General Assembly and Gov. John Carney to halt the process for further review, stating that state retirees have “paid their dues and deserve better.”
“There was no vetting process that was offered to legislators or members of the retirees’ community. There were absolutely no attempts to keep the public, retirees or legislators informed about this decision or its potential harm to their benefits. This maneuver has been foreshadowed by secrecy and falsehoods,” Rep. Kowalko said.
Ms. DeMatteis has since stated that the new plan is not privatized, and that it was specifically crafted to mirror the current plan in addition to its new benefits. Faith Rentz, who serves as director of Statewide Benefits and Insurance Coverage and is a member of the Retirement Benefit Study Committee, said that over the course of the committee’s public meetings, the plan had received support from select retirement associations. Additionally, the Retirement Benefit Study Committee submitted at least two reports regarding their findings and discussions to Gov. Carney and members of the General Assembly.
“I want to be very clear that this is a premium health care plan for our retirees. We are adding benefits, we are keeping their no and low costs the same, and we’re helping to protect the future viability of our pensioner health care plan for decades to come,” Ms. DeMatteis said.
Rep. Kowalko also questioned how often pensioners would be denied care through the plan, stating the 8% denial rate was concerning. Highmark approves 92% of requests at the time of submission, and half of the 8% of denied cases are related to appropriate level of care, which Ms. DeMatteis said will not affect the care received by the patient.
The move to a Medicare Advantage Plan for state pensioners will address Delaware’s $10 billion in unfunded liability, also known as the Other Post-Employment Benefits Liability. With the General Assembly’s agreement to put aside 1% of the prior year’s budget toward an Other Post-Employment Benefits Liability trust fund, Ms. DeMatteis hopes the funding will protect the future of the state’s pensioner health care plan.
Prior to the change in plans, the liability was expected to grow to $31.3 billion by 2050, but with the implementation of Medicare Advantage and yearly allocation to the trust fund, Ms. DeMatteis said the liability could shrink to $3.1 billion by 2050.
While the Medicare Advantage Plan will not go into effect until Jan. 1, the annual State of Delaware Medicare Open Enrollment will take place from Oct. 3 to Oct. 24.
In coordination with Highmark, the state held 18 educational sessions on Medicare Advantage in August. Ms. DeMatteis said sessions are planned for September ahead of open enrollment, and the state will continue using every avenue to inform its pensioners of the change.