Bethany Hall-Long

PHOTO COURTESY OF delaware.gov

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By Joseph Edelen

DOVER — Recommendations for the future of retiree health care in Delaware have garnered bipartisan support from members of the General Assembly since an extensive state report was released late last year.

That was also on display Feb. 19, when the Retiree Healthcare Benefits Advisory Subcommittee’s suggestions were presented to lawmakers during a joint meeting of the House of Representatives and Senate health committees.

During the hearing, subcommittee chair Lt. Gov. Bethany Hall-Long outlined a map to providing the best pensioner health care possible in a fiscally sustainable way, among other guidance.

The subcommittee’s core recommendation — taking Medicare Advantage coverage off the table — was agreed upon by several legislators on both sides of the aisle, with some noting the widespread opposition from pensioners dating back to 2022’s near-implementation of that plan.

“It’s always been about making sure Delaware’s current retirees, current employees and future employees have the best access to health care, … and we’re ensuring we have the best plan design, the best eligibility criteria and that we put in place sustainable long-term funding,” Lt. Gov. Hall-Long said.

“It was very clear that individuals were not in favor of Medicare Advantage. … I’m not in favor of Medicare Advantage for retirees.”

An extensive part of the discussion regarded the recommendation to keep current Medicare-eligible and pre-Medicare state retirees, as well as state employees who retire prior to Jan. 1, 2025, on the existing Medicfill plan.

This was a point of priority for committee member Rep. Mike Smith, R-Pike Creek, and others, who discussed the potential of a set hire date leading to a wave of new retirees — a concern brought up frequently during the subcommittee’s 20 meetings over 10 months.

“Another thing I’ve been saying the whole time is, we just need to pick a date, and all new hires, they need to have that expectation. That’s what this is: It’s expectation setting (and) communication, fundamentally,” he said.

Lawmakers discussed this topic at length, with Lt. Gov. Hall-Long stating that, while grandfathering in existing retirees’ coverage and taking Medicare Advantage off the table were the group’s major takeaways, the last thing the state wants is a “mass exodus or confusion with a retirement date.”

To combat that, she said the committee made clear that changes to plan design, eligibility and percentage share would be limited to employees hired on or after Jan. 1, 2025.

Further, funding retiree health care is also a key factor going forward, she noted.

Delaware’s other post-employment benefits liability for providing pensioner health care sits at $8.9 billion — $8.4 billion of which is unfunded. With the enactment of Senate Bill 175 last July, the state will carve out 1% of the previous fiscal year’s operating budget to fund the liability.

If there were no funding measures or changes to plan design and eligibility, the liability could grow to as much as $20.7 billion by fiscal year 2043, according to the Department of Human Resources.

“Funding has been an issue with the OPEB liability, and as I stated, this was a unique committee that had unprecedented public input,” Lt. Gov. Hall-Long said. “It was also a time in which we had a window of opportunity; we have members of the General Assembly and others coming together, all the stakeholders, saying, ‘How can we solve this?’”

Regarding financing, the subcommittee recommended the continuation of the 1% general fund carve-out to the liability, as well as incrementally increasing other post-employment benefit payroll prefunding every fiscal year, until reaching 10%.

Another key goal of the subcommittee’s was to rebuild trust with retirees who fiercely opposed the adoption of Medicare Advantage.
The plan, which was set to go into effect Jan. 1, 2023, was halted by Delaware Superior Court following a lawsuit filed by state pensioners and the organization Retirees Investing in Social Equity Delaware.

That movement has been supportive of the subcommittee since its inception last January, as well as its recommendations for the next steps.

RISE co-founder and former New Castle County Councilperson Elisa Diller applauded the group’s work during the Feb. 19 hearing, stating that its process “modeled what every citizen wants in terms of citizen participation in a committee.”

“We can’t stress enough the need to make sure that there’s the follow-through with providing that 1% of funding in the future, to make sure that we aren’t where we are again,” she added.

Ms. Diller also advocated for the passage of House bills 281 and 282, sponsored by Rep. Paul Baumbach, D-Newark, who served as a co-chair of the Retiree Healthcare Benefits Advisory Subcommittee.

Those measures would respectively legislate the removal of Medicare Advantage from consideration and alter the makeup of the State Employee Benefits Committee for more transparency.