Guest Commentary: State retirees: We only ask for fairness regarding health benefits

Our (current) medical care is subsidized by the federal government to the tune of 80%. The state is only paying 20% of our medical bills, while paying 100% of everybody else’s. Why in the world would you get rid of the only plan that is 80% subsidized by the federal government?”

Following a long career at the Department of Labor, Karen Peterson served 14 years in the state Senate. She also served eight years as the president of the New Castle County Council and currently chairs the New Castle County Planning Board.

In 2016, I retired after nearly 42 years of state service, fully expecting to receive a Medicare supplement health care plan, which is what the state provided for decades.

When I received my July 2022 retiree newsletter, I learned that the state had chosen a new Highmark “Medicare Advantage” plan for its Medicare-eligible retirees. I had never heard of Medicare Advantage, but the newsletter assured me that the benefits were the same as we already had, only better. Over the next month, I would learn that nothing could be further from the truth. It does not have the same benefits or, as misrepresented, the same access to doctors or the same out-of-pocket costs.

Once I learned just how bad Medicare Advantage plans are, I joined forces with other retirees, and on Sept. 25, 2022, we filed a lawsuit to stop the state from implementing the plan. We were successful for the time being, but we know the state intends to try again.

So, on Jan. 12, the legislature did what it always does when they don’t want to deal with a problem head-on. They create a committee. Senate Bill 29 creates the “Retiree Healthcare Benefits Advisory Subcommittee” to make recommendations about retiree health care. The subcommittee is loaded with the same cast of characters who selected Medicare Advantage last year, so we know what their recommendation is going to be.

What follows are excerpts from comments I intended to make at the Senate Executive Committee hearing on the bill. The committee, however, gave us only 60 seconds each to speak, after having given the state officials all the time they wanted in a behind-closed-doors caucus meeting. They clearly were not interested in what we had to say.

“I want to begin by addressing the Medicare Advantage issue because, given the composition of the subcommittee created by this bill, it’s clear ‘the fix is in.’

“First, Medicare Advantage and Medicfill (our current coverage) are not the same. The two plans are ‘substantially different,’ as the Superior Court confirmed.

“Second, there is nothing ‘customized’ about the Delaware Medicare Advantage plan, as the administration claims. It follows the basic business model of all Medicare Advantage plans, which is to overcharge Medicare, while delaying and denying medically necessary care to retirees. That’s how they make their money. How else could Highmark provide $66 million worth of health care to Delaware retirees — for free? This business model is so lucrative that the contract between Highmark and the state (signed Sept. 28, 2022) included a ‘kickback’ provision, whereby Highmark would split its profits with the state — profits made by denying medically necessary health care services to retirees. They do this by requiring preauthorization for 2,030 medical procedures and medications.

“Third, in the past year, the failures of Medicare Advantage plans have been well documented and are becoming more apparent over time:

• One study, done by the federal government, found disturbing evidence that Medicare Advantage plans delay and deny medically necessary care to their members.
• A congressional hearing on “Protecting America’s Seniors” identified the same problems.
• A recent study of cancer patients found that Medicare Advantage patients were twice as likely to die from certain types of cancers than traditional Medicare patients.
• Another study found that diabetes patients on Medicare Advantage have poorer health outcomes and disparities in care compared with traditional Medicare patients.
• Another found that Medicare Advantage plans are hindering access to methadone treatments for drug addiction.

“Given Delaware’s serious problem with cancer, diabetes and drug addiction, why would the state choose a health care plan that fails in all three categories?

“SB 29 will do absolutely nothing to resolve the health care unfunded-liability problem because the subcommittee created by this bill is loaded with the people who are hellbent on shoving Medicare Advantage down our throats. We already know what their recommendation is going to be. But this way, you can all pat yourselves on the back and say, ‘There, we fixed that. Those old folks wanted a seat at the table, so we gave them a seat at the table.’ But, actually, it’s more like a couple of deck chairs on the Titanic. We might be old, but we’re not stupid. This bill attempts to placate us, to keep us busy, to distract us, while this administration works to ram Medicare Advantage through again.

“We realize that the unfunded-liability problem is an issue — and it has been for the past 17 years. For 16 of those years, the state did nothing about it. Then, in a timespan of only three months, they decided to drop a wrecking ball on Medicare retirees — nobody else, just us. But we are not the problem. We just happen to be the ‘low-hanging fruit’ — the old folks. But getting rid of us doesn’t solve your problem. After all, our medical care is subsidized by the federal government to the tune of 80%. The state is only paying 20% of our medical bills, while paying 100% of everybody else’s. Why in the world would you get rid of the only plan that is 80% subsidized by the federal government?

“There are other options that would have a greater impact on reducing the unfunded liability than by taking away our Medicare benefits and giving them to an insurance company to make a profit at our expense. If you were proposing to create an independent, unbiased committee, instead of a rubber stamp for the administration, you would learn about some of those other options, all of which would have a greater impact than Medicare Advantage.

“The state has provided a Medicare supplement plan to retirees for decades — and we relied on that when we retired. If you want to do something constructive, let us keep the benefits we already have, just like you do when you modify pension plans — the people who are already in the plan stay there. Later, retirees might get a new plan. That’s how it’s always been handled in the past — until now.

“In closing, let me add one more thing. There is a provision in the Delaware State Constitution (Article XV) that says that the legislature, or other body, cannot reduce the emoluments of office of a public officer. One of the underlying principles of that provision is that you don’t change the rules after the game begins. But that’s exactly what the state is trying to do. I realize that not all retirees are covered by the emoluments clause — but thousands of us are — and there is no reason that the underlying principle of fairness should not be applied to all Medicare retirees.”

Editor’s note: Senate Bill 29 was passed by the Senate on Jan. 18 and by the House on Jan. 26. It was subsequently signed by the governor.