Change to health plan will move forward

The change to state pensioners' health care plan caught both retirees and lawmakers off guard, which led to Democratic Senate leaders asking Gov. John Carney to push the implementation of the new Medicare Advantage plan.

The Carney administration has denied this request, citing contractual obligations among other reasons. Ultimately, according to a letter to lawmakers obtained by Delaware Online/The News Journal, the plan to replace retiree's Medicare plan is already in motion and it's too late to stop it.

The plan will go into effect on Jan. 1, 2023.

Highmark Blue Cross Blue Shield Delaware, the insurer offering the Medicare Advantage plan, has made concessions in light of the criticism among retirees, according to this letter, most notably a four-month delay of preauthorization requirements.

But this doesn't ease the concern of many retirees, who fear this change could result in denials or delays of necessary health care. Many have come out in droves in recent weeks, expressing disappointment, anger and confusion over the state's decision.

"Their questions are fair and thoughtful," lawmakers wrote about retirees in a letter to the governor. "They simply want the peace of mind that their new plan will serve them well and keep them healthy."

For decades, Delaware has struggled with rising health care costs. The state has$10 billion of unfunded liability for retiree health care. It's expected to grow to $33 billion in 2050 if the state does nothing.

Like Delaware, many states and cities have transitioned to Medicare Advantage as a way to control ballooning health care and pension costs. It consists of Medicare plans offered by private companies.

The Delaware plan is being offered through Highmark, which is the largest insurer in the state. There are about 25,000 state retirees that will be covered by this type of insurance.

Medicare requires that all companies offering Medicare Advantage plans to cover everything Medicare Parts A and B cover, which is hospital coverage and doctor and outpatient services.

For Delaware's plan, retirees must be enrolled in the Medicare Advantage plan in order to receive the benefits of Medicare Part D, which is prescription drug coverage. State officials attribute this to requirements made by the Centers for Medicare and Medicaid.

Delaware officials have maintained that the state's plan is different from other Medicare Advantage plans, particularly that state pensioners and their spouses will be able to keep their health care providers − which isn't always the case with Medicare Advantage plans.

But Medicare Advantage plans have received intense scrutiny at the national level. The U.S. Department of Health and Human Services Office of the Inspector General published a report in April that found that there have been "widespread and persistent problems related to inappropriate denials of services and payment."

In February, the state awarded Highmark a three-year contract to provide the Medicare Advantage plan. Months later, the General Assembly in June voted to approve putting 1% of the previous year's budget into a trust fund for retiree health care.

Yet some lawmakers were unaware at the time of how significant the changes to Medicare would be. Rep. John Kowalko, who is retiring at the end of his term, has been among the most vocal critics of the change.

He told Delaware Online/The News Journal last month that there should have been a report detailing the "dramatic change going to take place that will be in the budget." Instead, he said, the state slid it "under the cover of darkness."

State representatives and senators have, in recent weeks, held town halls with state benefit officials for retirees amid the response.

Senate Democratic lawmakers sent a letter to the governor on Sept. 9, asking one last time for the administration to push the implementation of the Medicare Advantage plan. The letter noted that lawmakers had previously done "multiple rounds of probing that possibility."

Lawmakers, in the letter, made it a point to not criticize the Carney administration, or blame it directly for the mass confusion and anger among retirees. It also acknowledged that lawmakers voted on this plan to move forward months ago.

"Ultimately, the General Assembly accepted this plan as part of the public budget process based on the (State Employee Benefit Committee's) research and recommendation and because we know that doing nothing is not an option," Senate Democrats wrote.

"But our work does not stop with our votes. It is critical that we use our voices to amplify the questions of our constituents."

The letter also noted new changes to the Medicare Advantage plans, which lawmakers wrote came as a result of "input in recent weeks." In addition to the brief delay of prior authorization, Highmark will provide quarterly reports on denial and approval rates and expand out-of-network access, which has been a particular worry for retirees.

In a separate letter to constituents, obtained by Delaware Online/The News Journal, Senate President Pro Tempore Dave Sokola wrote on Aug. 30 that lawmakers were aware that "Delaware providers have informed patients that they won't accept the Highmark Medicare Advantage plan, and that is of concern."

He noted that, according to the Carney administration, 93%-95% of Medicare providers in Delaware have agreed to remain in the Medicare Advantage network. The state is "working with Highmark and the Delaware Medical Society to connect with the remaining 5-7% of providers," he said.

Pensioners, under the new plan, will have access to the same doctors that accept Medicare, state officials said.

Claire DeMatteis, secretary of the Department of Human Resources, and Cerron Cade, director of the Office of Management and Budget, wrote in response to lawmakers on Sept. 13 that the Medicare Advantage plan can't be pushed due to the contractual obligations, open enrollment being weeks away and insurance premium rates already being set.

Among the other reasons, the change to Medicare Advantage, which was a part of the state's budget, was passed by the General Assembly and signed into law by the governor in late June.

DeMatteis and Cade wrote in the letter that the Department of Human Resources carved out 12 seasonal positions to help with customer service regarding Medicare Advantage. The state is also working with Highmark to amend the final contract to include performance guarantees.

During a State Employee Benefit Committee meeting Monday, state officials noted that changing to the Medicare Advantage plan is likely one of several decisions that will need to be made in order to reduce the state's unfunded liability.

This could include setting a minimum age requirement to enroll in the retiree medical plan of 60 for state employees or 55 for employees subjected to mandatory retirement age for future retirees. Another could be reducing state subsidy for a state employee's spouses from 100% to 50% for future retirees after a certain date. This wouldn't affect current retiree spouses.

Several retirees at this meeting voiced their concerns and frustrations at the state for making this decision. Dozens more listened to the meeting virtually. Nearly every retiree who made a public comment expressed the same sentiment: They felt the interests of the state were being prioritized over the needs and interests of state retirees.

One retiree expressed concern that her medical services might be denied as a result. She said she receives an infusion every eight weeks and is now concerned the Medicare Advantage plan won't cover it.

"I fear what lies ahead for us all," she said.

Highmark Blue Cross Blue Shield Delaware, the insurer offering the Medicare Advantage plan, has made concessions in light of the criticism among retirees, according to this letter, most notably a four-month delay of preauthorization requirements.