The news has come out in dibs and dabs, but it is becoming increasingly clear that rising state employee and retiree healthcare costs have reached the crisis stage.
In his recent budget address, Gov. John Carney noted that healthcare costs now account for about one-third of the state’s $6 billion budget.
One option is increasing state employee healthcare premiums by 27%, a nonstarter in the current environment.
The cascading impact could be seen as the University of Delaware instituted a staff pay freeze and other measures to deal with a budget shortfall. While many things contributed to UD’s predicament, healthcare is one driver. (See story above).
The looming crisis comes as an effort to rein in retiree healthcare costs through a controversial Medicare Advantage plan has hit a buzzsaw. Retirees put the heat on the panel by heading to Dover to talk about broken promises and getting a court ruling in their favor.
Medicare Advantage can make life more difficult for retirees because it attempts to rein in costs by using a network of providers and an insurance gatekeeper on treatment to rein in “frequent fliers.” That can lead to rejections of what most of us would consider necessary treatment.
It may rule out Philadelphia doctors out of network unless the retiree wants to pay extra. By contrast, the current plan is the Cadillac or Mercedes Benz of health insurance many private sector retirees can only dream about.
Meanwhile, Medicare Advantage insurers also take heat over claims that they have pocketed billions in profits. Progressive Democrats elsewhere are attacking Medicare Advantage and that resonates with the current General Assembly.
A state panel is working on alternatives, but a lack of urgency seems to have made its way to all branches of state government. After all, if the judge or legislator has coverage, nearly every decision or court ruling on health coverage has some built-in conflict of interest.
The General Assembly has used surpluses to plug previous gaps. However, signs point to flat or decreased state revenues in the following fiscal year.
A third-party study and report is needed in any effort to deal with the issue. Whether that happens is unclear, given the tendency to take a “not invented here” approach to tough issues.
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