Guest Commentary: Analysis raises questions on state’s retiree Medicare stance


Mary Graham is active in the Medicare Advantage topic as a concerned spouse of a retired University of Delaware faculty member and the volunteer legal liaison for Retirees Investing in Social Equity Delaware. She earned her law degree from Yale Law School.


“If you pick up a starving dog and make him prosperous, he will not bite you. That is the principal difference between a dog and a man.” ― Mark Twain (


Retired state employees contributed through their work over decades to Delaware’s current prosperity. But the Carney administration now would bite them.

As this newspaper has covered, the administration has been pushing through Medicare Advantage for state retirees (i.e., retired employees of the state, school districts and affiliated groups), starting with its under-the-radar policy switch in February 2022 to Medicare Advantage from traditional Medicare.

You might ask how the administration could accomplish this policy switch when a state committee, the State Employee Benefits Committee, is responsible for state health care benefits. The answer is that administration officials are the leaders of that committee, and they endorsed Medicare Advantage as having the “same plan design” as state retirees’ traditional Medicare supplement plan — only with “new perks”! But they held back from the committee insidious problems making Medicare Advantage far from the “same.” And the administration failed to comply with open-government and meeting laws, thereby leaving retirees blissfully unaware.

Much should have been said about the deep problems with Medicare Advantage — the privatized form of Medicare managed by insurance companies that are earning record profits from the Medicare trust fund that state retirees paid into during all their working years.

From a human standpoint, a big problem is that the insurance companies effectively take over responsibility for deciding members’ “medically necessary” care. They then exercise that power through use of “prior authorizations” — without accountability or consequences — to delay and deny needed care.

There is a reprieve from Medicare Advantage now because of litigation brought by state retirees after they learned of the switch and what it really meant by the skin of their teeth. The reprieve allows us to bring our cause to the new committee, the Retiree Healthcare Benefits Advisory Subcommittee formed legislatively by Senate Bill 29, that is looking afresh at retiree health care options.

Why has the administration pushed Medicare Advantage? Purportedly for stability of the state’s short- and long-term finances. To pressure test this notion, four of us spent hundreds of hours examining and analyzing the public record and data on the finances of Delaware’s retiree health care. The new committee recently allowed us to make a 30-minute presentation on our findings.

Here is what we found and presented:

On short-term finances, the administration paints a misleading picture. Perhaps most egregiously, they presented both to the legislature and the Retiree Healthcare Benefits Advisory Subcommittee a slide asserting that active employees “subsidize” through their premium contributions the annual costs of state retirees. This was an inflammatory statement based on nonsensical analysis. The active employees do not even cover their own annual costs, so their premiums can hardly “subsidize” retirees. And why should employees or retirees be expected to fully cover the cost of their health care? Health care is a touted benefit that helps the state hire and retain a top workforce!

On long-term finances, the issue is the so-called “other post-employment benefits” (OPEB) liability — for the promised benefit given to state employees for their health care in retirement. This liability is the primary reason for worrying about the finances of the state retiree health care benefit because the state’s bonding agencies care about it.

Before your eyes glaze over, think of this as like your credit card. You have to worry about your monthly payments but also how you are progressing on paying down the balance. That balance is akin to the OPEB liability. Paying only minimum monthly payments might allow your balance due amount to grow a lot.

We examined the bonding agency reports and found nothing to suggest a need for drastic measures to prevent a catastrophe. If anything, Delaware’s financial situation is lauded. And we learned that progress on other post-employment benefits liabilities is the touchstone.

We examined state audit reports and the reports, minutes and presentations of an earlier committee, the Retirement Benefit Study Committee, formed and charged by Gov. John Carney for studying the OPEB liability. We found that, contrary to the state’s assertions, that group had not recommended the switch to Medicare Advantage. It did recommend further study, but the administration instead jumped over it to lead the Statewide Employee Benefits Committee to adopt Medicare Advantage without further study.

In fact, the RBSC never found that adoption of Medicare Advantage was necessary or sufficient to show satisfactory progress on the liability. Other changes, such as to eligibility (phased-in), showed greater impact. As did enhanced funding (even at a level far below the pension benefit funding). Enhanced funding, while in the budget bill, has not made its way to actual legislation that would stay in force. It should.

So what really explains the Carney administration’s continued misguided love of Medicare Advantage? Perhaps it is the kickback provision in the Medicare Advantage contract — called “gainshare” and determined by an undecipherable equation — whereby the state shares in the insurance company’s profits. This is an incentive that should scare anyone.

In the end, we do not know why the Carney administration has drunk the insurance industry’s Kool-Aid, when state employees — whether or not yet retired — contributed to and earned their great benefit of a traditional Medicare supplement. But we thank those in public office committed to keeping state retirees’ promised benefit.

Finally, I would like to recognize and thank the three other state retirees who worked on the analysis and presentation, Robert Clarkin, Steven LePage and former Sen. Karen Peterson.

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