Bay to Bay News | by Joseph Edelen
As state pensioners prepare for the switch to a Medicare Advantage Plan on Jan. 1, lawmakers and stakeholders have continued to express their concern regarding the change in coverage.
Stemming from the state’s plan to address its $10 billion Other Post-Employment Benefits liability, the change came after more than two years of deliberation on how the state could address the liability. This included routine meetings from the Retirement Benefits Study Committee and the State Employee Benefits Committee on possible solutions and the implementation of those solutions.
Claire DeMatteis, secretary of the Department of Human Resources and State Employee Benefits Committee co-chair, said between the implementation of Highmark Blue Cross Blue Shield Delaware’s Freedom Blue PPO Medicare Advantage Plan and the General Assembly’s annual allocation of 1% of the prior year’s budget to the Other Post-Employment Benefits trust fund, the liability could shrink to as low as $3.1 billion by 2050.
Delaware Coalition for Open Government President Keith Steck, who spent six years working on health care issues for the U.S. Government Accountability Office, questioned why the state had not acted sooner. In an interview Wednesday, Mr. Steck said in addition to the annual budget allocation, more money could have been added to the fund during years with budget surplus.
“It seems like there was this rush to do this, and I understand there was a need to deal with this long-term liability, and the governor has started that with this 1% commitment to create a funding stream, but the state has had hundreds of millions of dollars in surplus these last few years alone. So, my question is, why hasn’t there been a bigger contribution to the fund, even if it’s a one-time deal?” Mr. Steck said.
Mr. Steck said the state has known about the issue and has long underfunded the increasing cost of the liability. He said the state has failed to set aside funds to address the rising cost of providing health care to state employees, referring to efforts from a previous iteration of the Retirement Benefits Study Committee.
Under Gov. Ruth Ann Minner, a 2005 Retirement Benefits Study Committee report outlined the need to assess Delaware’s obligation to state retirees while maintaining the state’s superb credit rating, all in conjunction with new standards from the Governmental Accounting Standards Board. To comply with the board’s new standards regarding the state’s reporting of their liability and how they would address it, Gov. John Carney reestablished the committee in 2019 under Executive Order No. 34.
Public feedback
Retiring Rep. John Kowalko, D-Newark, has been outspokenly against the state’s change to Medicare Advantage, criticizing how the proposal was “hidden in the budgetary process.” Additionally, both Mr. Steck and Rep. Kowalko disagree with Ms. DeMatteis’ assessment of the vetting process as being a “very public process.”
While Retirement Benefits Study Committee meetings were open for public comment, Mr. Steck said they were not meant to be educational or informative meetings for the public to learn about the change. He said the committee’s discussions largely involved technical language related to the issue, and if attendees did not have prior background knowledge, they may not have understood the intricacies of the discussion.
“You’re allowed to listen, but you’re not allowed to ask questions. If these people are talking to each other in the committee about these technical issues, and you’re coming in late on the discussion, they’re not going to take the time to discuss one agenda item to bring you up to speed,” Mr. Steck said.
Department of Human Resources Communications Director Karen Smith confirmed that the public comment portion of these committee meetings were in a standard public comment format, and not in a town hall format, which would have allowed for attendees to have open dialogue and ask questions about the content of these meetings.
Pre-authorization
Another concern from opponents of Medicare Advantage is the required pre-authorization for certain non-emergency health care services. Rep. Kowalko referred to an April study from the American Association of Retired Persons that showed a 13% higher rate of denial of services for Medicare Advantage Plans, stating that the plans were “like the fox guarding the hen house.”
Ms. DeMatteis said pre-authorization was “the one bump (the department) needed to get people comfortable with.” While in negotiations with Highmark, Ms. DeMatteis said the state was persistent in finding out how long authorization would take and how often care would be denied. She said urgent, non-emergency authorizations would be approved within a day, while standard authorizations would be approved within four days.
“Let’s put the changes into perspective. We’re not cutting benefits; we’re actually adding benefits. We’re reducing monthly premiums for those who have to pay it and we recognize that there’s a large number of pensioners who don’t have to pay monthly premiums,” Ms. DeMatteis said. “All we’re saying is we have to make sure, just like active state employees, that health care services are deemed medically necessary.”
Prior to the implementation of the new, specialized Medicare Advantage Plan on Jan. 1, 2023, pensioners will have the opportunity to make changes during Delaware Medicare Open Enrollment from Oct. 3 to Oct. 24.