Lt. Governor Hall-Long Outlines Recommendations to Protect State Retiree Healthcare, Foster Fiscal Sustainability
The crucial issue of making sure state retirees get the healthcare they need was the focus of a joint House and Senate Health Committee hearing this week. Leading the charge is Lieutenant Governor Bethany Hall-Long, chairing the Retiree Healthcare Benefits Advisory Subcommittee. She outlined her recommendations to protect state retiree healthcare. Subcommittee recommendations include: Limiting changes to plan design, eligibility requirements, or contribution share/percentage to workers hired on or after January 1st, 2025 as well as soliciting public comment before the SEBC holds a public vote to adopt the final request for proposal (RFP) for retiree healthcare plans. Further details are outlined below…
Additional Information from the Office of the Lieutenant Governor:
— Lt. Governor Bethany Hall-Long on Monday outlined an actionable roadmap
to protect state retirees’ healthcare and promote fiscal sustainability during a joint House and
Senate Health Committee hearing.
Meeting before the House Health and Human Development Committee and Senate Health and
Social Services Committee, Lt. Governor Hall-Long, chair of the Retiree Healthcare Benefits
Advisory Subcommittee, shared findings and recommendations from the subcommittee’s
inaugural report analyzing retiree healthcare benefits and long-term funding sustainability.
The General Assembly established the subcommittee in 2023 in response to concerns about
retiree healthcare benefits for current and retired state workers and how to address a growing
unfunded liability for those benefits. Sen. Bryan Townsend and Rep. Paul Baumbach serve as
vice-chairs.
“The retiree subcommittee brought a wide variety of stakeholders to the table including members
of the General Assembly, retirees, union leaders and cabinet members. We established an
unprecedented public process, creating a website to better inform residents, and taking public
testimony at every step to make sure everyone was heard,” said Lt. Governor Hall-Long. “I
want our retirees to know that their voices matter. Because of you, we were able to put together a
robust suite of recommendations that are designed to strike a balance, protecting healthcare
benefits for current retirees – including removing Medicare Advantage from consideration – and
addressing long-term sustainability so we can provide the best healthcare system for current and
future workers.
“We have a window of opportunity to act, and it requires everyone to take bold steps now to
meet this moment and protect and preserve the best healthcare not only for our retirees, but for
future generations. I stand ready to work with everyone to turn this report and these
recommendations into action.”
“I want to commend the RHBAS, led by Lieutenant Governor Hall-Long, for their hard work in
compiling such a thoughtful and detailed report on an issue that is top of mind for many of our
constituents,” said Rep. Kerri Evelyn Harris, chair of the House Health and Human
Development Committee. “Our state retirees have earned and deserve quality healthcare benefits
and the recommendations put forward by the subcommittee will help guide us in making
decisions that prioritize the well-being of our retirees and our state as a whole.”
“I want to thank the members of the Retiree Healthcare Benefits Advisory Subcommittee for all
of their hard work in developing a strong set of recommendations for how the State of Delaware
can maintain a robust and affordable retiree healthcare plan for years to come,” said Sen. Sarah
McBride, chair of the Senate Health & Social Services Committee. “My hope is that the State
Employee Benefits Committee and the General Assembly will now use this roadmap laid out by
the RHBAS to help ensure that current and future retirees receive the world-class healthcare
services they deserve.”
The subcommittee fostered an unprecedented public process, meeting 20 times over the course of
nine months and collecting 10 hours of public testimony. Members reviewed other states’
Medicare supplemental coverage, individual marketplace and Medicare plans, funding options,
and actuarial and financial data.
The group’s report, published in December 2023, addressed several aspects of retiree healthcare,
including strategies to address the Other Post-Employment Benefits (OPEB) Fund liability and
recommended changes to the process by which the state selects state retiree healthcare plans. The
estimated liability for retiree health care benefits is currently $8.9 billion, of which $8.4 billion is
unfunded. The net unfunded liability is expected to grow to $20.7 billion by 2042.
Subcommittee recommendations include:
- The state should neither request nor consider a Medicare Advantage plan going forward.
- Continue contributing 1% of general fund from the prior year to the OPEB fund.
- Increase OPEB pre-funding from 0.36% of payroll to 0.5%, then increase by an
additional 0.25% of payroll each fiscal year until it reaches 10%. - Ensure that current Medicare-eligible and pre-Medicare state retirees and state employees
who retire prior to January 1, 2025 will be entitled to Special Medicfill/Rx benefits with
no changes to the state share percentage of payments when they are Medicare eligible. - Limit changes to plan design, eligibility requirements, or contribution share/percentage to
workers hired on or after January 1, 2025. - Solicit public comment before the SEBC holds a public vote to adopt the final request for
proposal (RFP) for retiree healthcare plans. - Research and measure the cost of state-sponsored healthcare benefits for three subgroups:
current workers, eligible pensioners who are ineligible for Medicare, and eligible
pensioners who are eligible for Medicare. - Address the issue of healthcare pricing in Delaware, including statutory, regulatory, and
administrative changes in 2024 to bring more transparency, consistency, affordability,
and sustainability to healthcare prices and price growth.
The subcommittee also recommended modifying the state’s calculation for the portion of the
state share for healthcare that the state pays for retirees. The percentage is based on the number
of years of service for each retiree. The full list of recommendations and additional details can be
found in the full subcommittee report and in this press release.
The RHBAS will continue to meet this year to further discuss the issue of retiree healthcare
benefits and explore solutions.
