Delaware state insurance premiums may rise nearly 7% in each of the next three years, a benefits committee was told Monday.
The state of Delaware’s health insurance program could soon be split almost evenly between workers and retirees because of the shortage of workers and rising numbers of retirees.
That’s important because in general younger workers use less health care. Employers everywhere rely on that to offset the higher costs of older workers who generally use more health care services.
How much a program spends determines the cost of premiums, and the state of Delaware insurance program users may see premiums rise nearly 10% in each of the next three years, members of the State Employee Benefits Committee were told Monday.
A rise in premiums is necessary to help the state overcome a deficit now projected at $138.1 million by the end of fiscal year 2024, which starts July 1.
Claire DeMatteis, secretary of the state Department of Human Resources, said the state has about 2,000 job vacancies. Prior to the worker shortage of recent years, it usually had a few hundred jobs open at any moment, she said.
The state is hiring 150 to 180 workers per month, but seeing 60 to 80 workers retire each month, she said.
Those worker shortages are not evenly spread out, DeMatteis said. The Department of Correction, for example, has 300 open jobs.
While the state has stepped up its efforts to hire critical shortages in jobs such as correction officers, nurses, engineers and accountants, the remaining employees will be the ones who will bear higher costs, she noted.
It was not clear whether retirees paid premiums, too.
The state now has about 13,800 workers with an average age of 46.
Health insurance premiums
The committee — under fire in recent months for a decision to move state retirees to a Medicare Advantage program to try to save costs and make them more predictable — covered a slew of topics in its regular meeting.
The Medicare Advantage issue didn’t come up in the first two hours of the meeting.
Health insurance premiums had gone without being raised for about five years and the insurance program recently had avoided deficits because of federal and state COVID-19 payments, said Chris Giovannello in presenting budget numbers.
Whether and how much premiums should be raised has been a discussion in several meetings, with suggestions of spreading premium rises over three years in a “smoothing” process meant to avoid shock and awe from participants.
One option was raising premium costs nearly 17% in one year, but didn’t seem to be a popular idea.
Among other issues:
The state will move all bariatric surgery procedures to Surgery First rather than having employees or retirees working through Aetna or Highmark programs. About 200 people a year have that surgery, officials said.
One subcommittee considered whether health insurance plan drug co-pays should be raised $2 per prescription. The co-pays have not been raised in five to six years, the committee was told.
Several callers complained about the way the committee surveyed people using health insurance. The survey often asked those taking it to pick between two options they didn’t like, and one commenter said he was afraid that the committee would use the survey to say respondents picked a choice when they could not pick more than A or B.
The committee asked for more information about new weight loss medications before voting on whether the state program should cover it. Several callers asked the committee to remove the exclusion that now prevents users from having the insurance company pay for it.