DOVER- On Tuesday, the House passed two bills aimed at addressing the concerns of Delaware state retirees and improving the transparency and fairness in the State’s selection of retiree healthcare plans.
Taken together, HB 281 and HB 282, both sponsored by Rep. Paul Baumbach, would prohibit the state from considering Medicare Advantage plans for state retirees and make several changes to the State Employee Benefit Committee (SEBC), the group responsible for managing State employee and retiree benefit coverage.
“These bills are a meaningful first step toward restoring trust with our state retirees, who have served our state government for many years under the assumption that these benefits would be available for them when they retired,” said Rep. Paul Baumbach.
“It’s time that we put the healthcare needs of our state retirees at the forefront and address the very real concerns our retirees have raised over the past two years. With these measures, we are ensuring retirees not only the provision of quality benefits but also a well-deserved place in our decision-making processes.”
HB 281, also known as The Delaware Medicare Supplement Selection Act, would repeal the option of providing health care insurance to state pensioners under Medicare Advantage Plans.
In 2022, officials attempted to transition state retirees from a publicly managed special Medicare Supplement plan to a privately managed Medicare Advantage plan to reduce the sizable Other PostEmployment Benefits (OPEB) unfunded liability.
This change generated strong opposition from state retirees, who raised concerns about prior authorizations, providers not being in-network, and decreased services.
A legal challenge from retirees resulted in a temporary halt to the implementation of the new plan, which remains in place today.
HB 281 would address the concerns of retirees by requiring that the State select only Medicare Supplement plans as the healthcare plan for Medicare eligible Delaware state retirees, rather than a Medicare Advantage plan which requires retirees to relinquish the Traditional Medicare benefits they earned during their careers.
Under the bill, state retirees could still choose any plan on the free market, including Medicare Advantage.
A House amendment passed with the bill would provide the State with the option of offering Medicare Advantage to eligible pensioners hired on or after January 1, 2025. However, this would only be under specific conditions, one being that the retiree has the ability to choose whether to enroll in a Medicare Advantage Plan.
“State workers deserve to know that they can count on the benefits that were promised to them during their dedicated careers in public service,” said Senate Majority Leader Bryan Townsend, the Senate prime sponsor of HB 281 and HB 282.
“The final report issued by the Retiree Healthcare Benefits Advisory Subcommittee included recommendations for reforms the Delaware General Assembly should make to assure our retirees’ strong health benefits remain in place and give them a seat at the table for future discussions around retiree health care policy,” he said. “I am grateful to my colleagues in the House for moving these bills forward.”
A companion measure, HB 282, would revise the membership, structure, and procedures of the SEBC to increase transparency and accountability.
The bill aims to increase transparency by requiring more decisions to be made publicly, requiring the chair or vice chair to attend meetings in person, requiring committee votes for Request for Proposals (RFPs) selecting health care insurance plans, and requiring more information from the committee to be available publicly.
HB 282 would also increase retiree representation in the SEBC by requiring the Speaker of the House and the Senate Pro Tempore to appoint State retirees to the committee.
These changes would address longstanding concerns, both from retirees and current employees, regarding the visibility and makeup of the committee.
A House amendment to HB 282 would make these changes effective on January 1, 2025.
HB 281 and HB 282 will now go to the Senate for consideration.