Maryland government retirees face changes coming to their prescription drug coverage.
Maryland government retirees are in an uproar over changes coming to their prescription drug coverage after receiving letters from the Hogan Administration that some say are politically charged.
The Maryland Department of Budget and Management started sending letters to retirees last month to explain that their drug coverage shifts from a state plan to a federal Medicare Part D plan on Jan. 1. The letter blamed the General Assembly and the administration of former Gov. Martin O’Malley for the switch and some criticized Hogan for politicizing it as he seeks re-election.
Retirees from around the state, many on fixed incomes, have been calling legislative and local union offices worried about whether the switch will cost them more to pay for critical, life-sustaining drugs.
Some say the changes are coming too quickly. Enrollment for the roughly 38,000 state retirees begins in October for the new coverage starting at the beginning of next year.
“A lot of people have been retired for a long time and they don’t make a whole lot of money,” said Earl Ingram, a retiree from Nottingham. “They blindsided us. It really puts a lot of us in a bind.”
Gov. Larry Hogan proposed legislation on Monday allowing state employees to opt into a 401k-style plan rather than a traditional pension, a choice he says would help stabilize the state's pension fund and give workers more flexibility.
Ingram said he and his wife have no idea how much the shift might cost them.
The cost to retirees will vary by person and depend on factors such as what drugs are covered by the Medicare plan they select. In addition to a monthly premium, which they also pay for the state prescription plan, retirees will face a deductible of up to $405, depending on the plan they choose, that they don’t pay now, according to AFSCME, the union that represents state workers.
Adding to the emotional reaction to the new prescription plan, some say, is the political tone of the letters from the state budget office, the most recent dated June 13.
“They are making it look like the Democrats are behind all of this,” said Sue Esty, legislative director and political director of AFSCME. “He is coming out and saying to retirees that he is the good guy after all of this.”
Officials with the administration of Gov. Larry Hogan supported switching coverage for retirees on July 1, 2019, but the General Assembly chose the earlier date.
“We are committed to ensuring that the retired state employees impacted by this unnecessarily rushed process forced upon them by the legislature have the resources they need to obtain new coverage,” Hogan’s spokeswoman, Amelia Chasse, said in an e-mail.
The change in prescription coverage dates back to state pension reform passed by the General Assembly and signed into law by O’Malley in 2011, which the Hogan administration has supported. The legislation called for moving retirees to Medicare Part D by July 2019 to coincide with the federal government’s plan to close what is known as the doughnut hole — a gap in Medicare’s prescription drug coverage.
But in its recent budget, the federal government closed the doughnut hole early, starting Jan. 1, so the General Assembly chose to move up the switch date for state retirees.
Hogan’s budget officials testified twice against moving the switch to Jan. 1 and instead pushed to keep state coverage through July 2019.
“Despite this opposition from the Hogan administration, the legislature proceeded with its plan, which is now state law,” the letter to retirees said.
An effort in the General Assembly to extend state coverage until Jan. 1, 2020, giving retirees more time to adjust to the change, failed to make it out of committee because of opposition from the Hogan administration, said Del. Carol L. Krimm, a Frederick County Democrat who sponsored one of the bills.
State budget office officials testified against such a delay, saying it would be too costly to keep people covered for a longer period. Extending coverage through Dec. 31, 2019, would add $60 million to program costs, they testified.
State lawmakers instead moved the date to Jan. 1 to coincide with open enrollment for health plans, Krimm said.
Lawmakers also thought that having people enroll in a state plan for six months and then switch to Medicare in the middle of a Medicare plan year could be chaotic, said Alexandra Hughes, chief of staff to House Speaker Michael E. Busch. People might be confused by mid-year change, she said.
Switching in July also might be more expensive for retirees. They might spend the state plan’s out-of-pocket maximum of $1,500 before July , then face a new deductible with a Medicare Part D plan for the rest of the year, according to the nonpartisan Department of Legislative Services.
“When they didn’t support our extension, we decided this was the next best thing, otherwise retirees would be left hanging in the middle of the year,” Krimm said.
The General Assembly did find a way to maintain state coverage of prescription drugs for spouses and other dependents of retirees by using some of the savings created by switching on Jan. 1. Continuing to cover about 4,600 dependents who are not on Medicare themselves will cost about $5.2 million annually, according to the state budget office.
Krimm said the state budget office’s letter to retirees should have stuck to educating them about looming changes in their coverage.
“The purpose of the letter was to make sure people were covered,” she said. “The language in the letter I am not so sure about. I don’t know why we have to enter into a blame game and that is what some of this sounds like.”
As the politics play out, many retirees worry about being able to afford the new coverage.
Richard Houston, 76, worked for the state for 30 years as a bridge inspector and bridge construction engineer. He compared the changes to age discrimination.
“I retired and had this plan and then they just take it away,” he said.
Many retirees have been told that details about available plans under Medicare Part D won’t be available until October. They say they worked government jobs in part because of great benefits that are being stripped away now.
“We are all running around trying to figure things out,” said Mike Dunne, who worked in design and publications at Towson University for 35 years. His wife, Joan, worked at the university for 40 years.