‘Last chance’ bill to halt shift in Md. retirees’ Rx coverage unlikely to progress

ANNAPOLIS — A proposal to keep Maryland from shifting prescription drug coverage for some Medicare-eligible retirees at the end of the year is unlikely to progress in the legislature, a top lawmaker says, potentially burying what one retiree has called “our last chance” in a years-long effort to avert the switch.

While state officials have said that retirees should expect their out-of-pocket costs to remain about the same, retirees have said the state has been misleading in its attempts to equate the coverage level from the outgoing program with Medicare Part D, which helps cover prescription drug costs.

There are roughly 53,000 Medicare beneficiaries enrolled in the state’s benefits program, according to the Department of Budget and Management.

State Sen. Michael McKay, a Western Maryland Republican, has proposed maintaining state-funded coverage for those who began working for the state before July 1, 2011, but the presiding officer of his chamber said Tuesday that “I don’t see us moving forward on that front.”

“This is a tough issue, and change is very difficult,” Senate President Bill Ferguson said to reporters. “We’ve put in a lot of protections, and the federal government has added protections to Medicare Part D about out-of-pocket costs.”

Shifting to Medicare is expected to have a “huge impact” on the state’s financial stability, said Ferguson, a Baltimore city Democrat.

Ending state coverage for Medicare-eligible retirees would save the state roughly $180 million in cash annually and represents a reduction of $8 billion in liability for other post-employment benefits, according to the Department of Budget and Management.

But Peta Richkus, who was Maryland’s secretary of general services for four years under Democratic Gov. Parris Glendening, has said the state has exaggerated the cost of the program and stated that net spending for the benefit in fiscal year 2022 was $119.4 million, or 0.2% of the general fund operating budget.

Another retiree, James Roberts, a professor emeritus in the political science department at Towson University, said that he would have to pay several thousand dollars more for his prescriptions under the Medicare coverage plans available this year, considering that fewer of his prescriptions would be covered.

Under Medicare Part D, retirees will select a coverage plan based on the prescriptions they take.

The state is expected to contribute, tax-free, to a health reimbursement plan to help certain retirees pay their out-of-pocket costs under Medicare — including to help cover the difference between the state’s $1,500 individual out-of-pocket limit and Medicare’s $2,000 cap that will take effect in 2025.

“In the case that something does happen, and there is an out-of-pocket expense that is significant, the state will bear that cost once retirees hit a certain threshold,” Ferguson said. “It is slightly higher than where it is today, but the vast, vast, vast majority of retirees will pay nothing more in their prescription benefits.”

Richkus and Roberts, though, said the outgoing state-funded coverage is more extensive than the plans offered through Medicare Part D and that the largest expenses retirees may face will be for drugs not covered under their new plan.

Richkus noted that, for instance, the state’s plan covers 15 different proton pump inhibitors, used to treat peptic ulcers, gastroesophageal reflux disease and other conditions, while Medicare Part D plans are required to offer just two.

A retiree would be responsible for the full cost of a drug not covered under their plan, and the uncovered drug wouldn’t count toward the $2,000 Medicare cap, they said.

In the coming months, the state is expected to select a Medicare drug coverage administrator for the new program. After selecting an administrator, the state plans to contact retirees about their coverage options, how to use their reimbursement plan money beginning next year, information about assistance in choosing coverage, and how and when to enroll.

Before open enrollment, which will be from Oct. 15 to Dec. 7, the state is expected to offer online education sessions and in-person sessions across the state, providing retirees an opportunity to speak with a licensed benefits advisor for information about plan options, the letter states.

Ferguson said lawmakers have encouraged the state Department of Budget and Management to “overstaff” to help retirees navigate the change to Medicare.

“The Department of Budget and Management needs to do whatever possible to have the resources to give the right guidance to retirees,” he said.

The shift to Medicare was originally set to take effect in 2019, but state retirees filed a lawsuit claiming that the change was an unconstitutional breach of contract.

The U.S. Court of Appeals for the 4th Circuit last year ruled in the state’s favor and an injunction forcing the state to continue its coverage ended in July.

“Assuming that there’s not a further appeal or some sort of injunction,” Ferguson said, “I suspect that we will see that this Department of (Budget and) Management will move forward with the changeover at the end of this year.”