Changes in health care coverage contemplated for Delaware employees

DOVER — A task force created to study the rapidly rising costs of state employee health care failed to agree to a short-term fix but concluded extended options will be discussed and employees still will face potential changes to their plans soon.

Higher premiums and other options, such as emergency room copays and general health incentives, likely will be discussed in the next few months.

With Delaware facing a $60 million gap in health care costs for the fiscal year ending June 30, 2015, the State Employee Benefits Committee proposed a variety of changes, chiefly increased copays and deductibles for the government employees.

Ann Visalli

Ann Visalli

The plan was roundly criticized and facing pressure from the legislature, so the committee ultimately avoided a major overhaul but cautioned the situation remains untenable long-term.

The state government’s health care costs have risen precipitously, a result of several factors, including higher care costs and an unhealthier population.

In fiscal year 2010, the state spent $527 million on health care. That figure climbed to $708 million last year, leading to the General Assembly establishing a group to study the health care model and look for possible savings.

The final report from the task force, released last month after several meetings and testimony from state workers, concludes health care costs are growing at approximately twice the rate of state revenue.

While the conclusions do not offer definitive recommendations, a number of options are provided, and the task force will continue to advise the State Employee Benefits Committee.

Members of the task force, consisting of state lawmakers, officials and labor representatives, were in favor of lowering spending but could not reach consensus on specific options.

They did conclude that changing payment options to a value-based model, rather than a fee-for-service one, is a goal worth examining further. A shift away from negotiated discounts off retail prices could save money and lead to better care, the report states, as the state would be paying for quality of care rather than quantity.

According to the final report, the health care industry is shifting toward a value-based system, but Delaware is behind the curve.

Office of Management and Budget Director Ann Visalli said Tuesday more changes to employee plans will be needed to balance the health fund. The state’s health care reserve is depleted, and while Ms. Visalli does want to build that up, it takes a backseat to simply closing the gap.

General tools to simplify plans and push employees toward cost-effective care figure to be discussed.

Deductible increases are not the preferred option, Ms. Visalli said.

Another possible change set forth in the report is the elimination of the double state share, which allows couples who began working for the state before fiscal year 2013 to essentially pay one premium while both partners are covered. Such a change, which is estimated to cost the state $3.5 million annually, would need to come through legislation.

According to the report, Delawareans are less healthy than the average American, and employees of the state are less healthy than the average Delaware citizen.

Delaware public workers, who have a median age of 47, suffer from chronic conditions such as diabetes, obesity and chronic obstructive pulmonary disease at a greater rate than the typical citizen of the First State.

Approximately half of health care spending is on 5 percent of the population.

About 30 people submitted comments to the task force, generally requesting the state leave benefits alone.

Several said benefits are an incentivizing factor to work for the state and urged officials to avoid increasing costs, although one person did support higher premiums.

The State Employee Benefits Committee will discuss options for health care after the governor reveals his recommended budget at the end of this month.

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