Group recommends discontinuing Medicare Advantage for state retirees

A working group charged with addressing state retiree healthcare benefits recently recommended that Delaware no longer consider a Medicare Advantage plan moving forward.

The General Assembly established the Retiree Healthcare Benefits Advisory Subcommittee a year ago in response to concerns about retiree healthcare benefits for current and retired state workers, and how to address a growing unfunded liability for those benefits. A 2022 attempt to transition from a publicly managed Special Medicfill Supplement Plan to a Delaware-specific Medicare Advantage plan generated strong opposition from state retirees and an ensuing court challenge to the plan by RISE Delaware.

The group’s other recommendations include:

• Continue contributing 1% of general fund from the prior year to the Other Post Employment Benefit fund

• Increase OPEB pre-funding from 0.36% of payroll to 0.5%, then increase by an additional 0.25% of payroll each fiscal year until it reaches 10%

• Ensure that current Medicare-eligible and pre-Medicare state retirees and state employees who retire prior to Jan. 1, 2025, will be entitled to Special Medicfill/Rx benefits with no changes to the state share percentage of payments when they are Medicare eligible

• Limit changes to plan design, eligibility requirements or contribution share/percentage to workers hired on or after Jan. 1, 2025

• Solicit public comment before the State Employee Benefits Committee holds a public vote to adopt the final proposal for retiree healthcare plans

• Research and measure the cost of state-sponsored healthcare benefits for three subgroups: current workers, and eligible pensioners who are ineligible for Medicare and those who are eligible for Medicare

• Address the issue of healthcare pricing in Delaware, including statutory, regulatory and administrative changes in 2024 to bring more transparency, consistency, affordability and sustainability to healthcare prices and price growth.