Delaware state employees to see health premiums rise 27% starting July 1

COVID-19 enhancements also disappear later this year for workers and retirees.

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The Delaware General Assembly in session at the Legislative Hall in Dover, Delaware

Legislative Hall in Dover, Delaware. (Johnny Perez-Gonzalez/WHYY)

This story was supported by a statehouse coverage grant from the Corporation for Public Broadcasting.

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Delaware state employees and retirees will see several changes to health insurance plans starting this July.

The State Employee Benefits Committee hiked health plan premiums by 27% beginning July 1 and declined to extend enhanced COVID-19 benefits set to expire at the end of June. The committee also made plan design changes to conform with laws mandating mental health and substance abuse treatment and equal access to medical treatment, and approved a new plan for state retirees.

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There was little public comment at the top of the meeting.

Consultants said February’s results produced a surplus of about $7 million in the budget, mostly due to prescription drug rebates. But the state health plans are suffering deficits due to the high cost of obesity and diabetes drugs and surgeries.

The committee is currently projecting to be nearly $30 million in the negative by the end of this fiscal year. But a premium increase of more than 25% could raise enough to be $30 million in the black by the end of Fiscal Year 2025, according to estimates. The committee decided on a 27% increase, which they had indicated in previous meetings they were likely to do.

Human Resources Director Claire DeMatteis said last month that without a premium increase for the 2025 fiscal year, lawmakers would have to find $232 million to help cover deficits for the following year.

“The state doesn’t have that money,” she said.

The committee voted to raise health insurance premiums for state employees by around 9% this time last year. Rate increases are projected for state employee premiums of .3% in FY26, 6.2% the following year, and 8.1% in FY28.

Employee contributions to their health plans will increase monthly in the next fiscal year by $9 to $87, or between $107 and $1,049 yearly. The state health plan’s share of contributions will increase from $214 to $573 a month per enrollee, or between $2,000 and $7,000 a year per enrollee.

Gov. John Carney added $200 million to his recommended budget to cover the state’s responsibility for the 27% premium increase for state employee health insurance benefits.

The SEBC also declined to take a vote to continue enhanced COVID-19 benefits. That means employees will pay pre-COVID-19 costs for services such as primary care visits, hospital stays and telemedicine.

The state employee benefits committee awarded the operation of the Medicare Supplement Plan for retirees to Highmark Delaware for a two-year term, effective January 1, 2025. It includes an optional one-year period extension. The state was sued by some retirees about two years ago after an attempt by the state employee benefits committee to move 25,000 retirees to a Medicare Advantage Plan through Highmark. Those upset by the planned change formed the advocacy group RiseDelaware, which has so far successfully sued the state to block the implementation.

Shaun O’Brien, policy director with the American Federation of State, County and Municipal Employees, voted no. WHYY News asked O’Brien about his no vote, but received no response.

State Rep. Paul Baumbach, D-Newark, said he attended the meeting virtually to check on the committee’s choice of vendors.

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“There’s been such a lack of confidence in the SEBC being reliable,” he said. “Frankly, the retirees felt like they were fooled, and that the SEBC went behind their backs to take away a Medicare Supplement and put in Medicare Advantage, which is anything but. So I wanted to make sure that the SEBC was doing what they told us they would do, which we had insisted upon, which is no more Medicare Advantage, and for this cycle, certainly put in the same kind of Medicare supplement that our retirees have been used to. And that was done.”

Baumbach said the committee lacks transparency. He is sponsoring two pieces of legislation that he said aim to make the committee more open and accountable.

The SEBC approved changes required by law that make sure there’s no disparity in access to care for people who have mental health or substance abuse disorders and people who need medical treatment. The plan changes impacted the Aetna CDH Gold, Aetna HMO and the Highmark Comprehensive PPO.

Committee members also signed off on wigs and mastectomy bras as enhanced women’s benefits, but did not approve cooling caps.

The grand total cost to the state for the changes to employee health plans was estimated to be between $507,000 and $557,000.

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