By Sen. Melony Griffith
In all the work we do in the Maryland General Assembly, we work hard to balance the interests of our state employees, state retirees and the taxpayers.
This session is no different as we seek to balance benefits for our valued employees and retirees with taxpayer obligations.
In 2007, the state was no longer allowed to account and pay for our retiree health care programs on an annual basis but instead was required to account for both the annual costs and the liabilities associated with any future costs. New national accounting rules required Maryland and all other employers make this change. It resulted in difficult conversations about what employee benefits could be realistically sustained into the future.
Maryland had that difficult but open conversation through the two-year long work of the Public Employees’ and Retirees’ Benefit Sustainability Commission representing experts and stakeholders from across the state on the issue. Unlike a pension program in which both the state and the employee contribute toward retirement, state employee health benefits are not guaranteed in retirement.
Based on the recommendations of the commission, a decision was made in 2011 to maintain the state retiree health plan but to require state retirees to enroll in a Medicare Part D prescription drug plan in 2019 similar to other Medicare eligible seniors once a coverage gap called the “doughnut hole” was closed. This reduced the state’s unfunded liabilities by $9 billion dollars.
Reduced Md. liabilities by $9 billion
Seven years later, as retirees were informed about the need to enroll in Medicare Part D for 2019, it created great uncertainty and questions for many retirees about the change and how it would work.
A number of retirees filed a lawsuit in federal court and while resolution is pending, the General Assembly took the opportunity to respond to the very valid retiree concerns as best we could. Simply returning Medicare eligible retirees to the state plan sounds easy, but the reasons for the 2011 action have not changed. Going back would add what is now an additional $11 billion to the state’s unfunded liabilities for Maryland taxpayers to grapple with in the future.
At the same time, we are not unsympathetic to the small number of retirees who could see significant out–of–pocket (OOP) costs increase because of their medical situation and prescription needs.
Broader action must be taken
I believe we must take broader action to rein in the costs of prescription drugs for all citizens and all seniors on Medicare Part D, but we did pass legislation to address the out-of-pocket costs of state retirees.
Senate Bill 946, which I sponsored along with most of my Senate colleagues of both parties, has passed the Senate.
It creates programs to limit out-of-pocket prescription drug costs for state retirees hired before the 2011 reform legislation. For current retirees, they, their spouses and dependents can seek reimbursement for OOP costs once they reach the same OOP limits as the state employee plan.
For future retirees, their spouses and dependents, they can seek reimbursement for OOP once they have reached the Medicare Part D catastrophic level.
Although it will be a different process, at the end of the day, state retirees who were hired before the 2011 reform bill will be protected from outrageous prescription drug costs.
It is not as easy as just continuing to do what we did before, but I believe we struck a fair balance between what we are providing to state retirees and what we are asking the rest of our citizens to pay for in the future.
I am glad we were able to come together and find this compromise to protect this group of state retirees but it is now time to find a way to protect all Marylanders from the skyrocketing and untenable cost of prescription drugs.
SB946 represents bipartisan collaboration at its best. The leadership of Senate President Mike Miller, Sen. Andrew Serafini and Budget Chair Nancy King as well as the work of the entire Senate of Maryland and the incredible General Assembly staff lead to the creation of important programs benefiting our citizens.
Sen. Melony Griffith represents District 25 in Prince George’s county and chairs the pensions subcommittee of the Senate Budget and Taxation Committee.