The State Employee Benefits Committee (SEBC) reports that there is currently a $15 million shortfall in state health insurance funding for this fiscal year.
Delaware spends an average of $1.2 billion on the Group Health Insurance Plan (GHIP) to provide health care for active state employees, their spouses and dependents, pre-Medicare retirees and state retirees.
Before the COVID-19 pandemic, Department of Human Resources Secretary Claire DeMatteis says the department saw much larger deficits than the current $15 million, but after the pandemic, health care visits were curtailed – they increased last year.
“During the COVID years, we just didn’t see people going into hospitals and getting procedures. We did not have to raise rates because we had a really significant surplus in the Group Health Insurance Trust Fund,” DeMatteis said.
She requested an increase in GHIP funding for fiscal year 2025, but the $15 million must be paid back by 30 June 2024.
At its November meeting, the SEBC identified coverage of weight-loss drugs as a major contributor to the deficit.
DeMatteis says Delaware joined several states and Medicaid last fall in deciding to cover weight loss drugs, but there have been more prescriptions than expected.
“The projections from our pharmacy benefit manager were that we would probably spend just under $2 million, and instead it’s well over $7 million,” she said.
During the meeting, concerns were raised that anyone who wanted access to weight-loss drugs could get a prescription, but DeMatteis explains that several conditions must be met.
The biggest factor is that a patient must be diagnosed with a comorbidity, meaning they have two chronic conditions, as well as evidence of a diet and exercise plan, before being considered for a prescription.
DeMatteis says there’s always a chance the funding could level off if fewer state employees use their health insurance in the next few months, or an additional appropriation from the General Assembly could be needed to cover the shortfall.
She says raising premium rates for state employees would be a last resort, and the committee will continue to monitor spending over the next seven months.
