Prescription Drug Update
Kathy Miller
It's time to contact your representatives!
If you have not already contacted your representatives and especially the governor, please do so now. On Wednesday, July 19, 2023, U. S. District Court Judge Peter Messitte ruled to dissolve the injunction that has provided prescription benefits to retirees since January 2019. This affects all State retirees. No one was grandfathered in. When Governor Wes Moore says, "Leave No One Behind," does he mean State retirees, too? If so, it's time for the governor to convince the State legislature to make this right for State retirees.
At the most recent hearing on June 29, 2023 re Fitch v Maryland, the judge said he would not make a ruling that day. The State's attorney said if the judge ruled in favor of the State, retirees would transition to Medicare Part D effective January 1, 2025, and SB 946 will take effect. Deborah Hill, attorney for Fitch (United We Matter) promised to appeal, so the court case is not over yet.
It's time to raise your voices to every senator and delegate. If you phone, contact them at their local offices. Ask your representatives to keep their promise and fix this the right way. Grandfather in all those who began their employment before July 2011 - retirees and current employees.
To look up your representatives:
Go to https://mgaleg.maryland.gov/mgawebsite
On the left top bar, under members, click “find my representatives”
Under “find my representative” click “lookup”
Enter your address and zip code
Click “find”
Click on the word "email" and you can send an email to both your senators and delegates with one email.
Be sure to send a separate email to the governor at this link: https://md.accessgov.com/governor/Forms/Page/cs/contact-the-governor/1
Let the governor know you want the State to keep its promise. Let them know that retirees and employees who began working before July 2011 should be grandfathered in and keep the prescription drug benefits they've earned.
The State made a promise to retirees and has not kept it, and they are in court arguing vigorously to cancel the prescription drug benefit.
At this late-July writing, Fitch v Maryland continues for those who retired before January 1, 2019. What if the court rules for the State? Fitch will appeal. If the court rules for Fitch, the State will appeal.
Also, if you would like to support the court effort and Deborah Hill, attorney for Fitch, who has worked tirelessly since 2018 and is the reason you have had your continued prescription benefits, mail a check to: Retirees Incorporated. PO Box 44102, Nottingham, MD 21236. Write in the memo line: Appeal costs.
Contact your representatives today!
These are highlights of the Prescription Drug Issue
In 2011 Congress planned to eliminate the Medicare Part D donut hole in 2020. The donut hole is a coverage gap or a temporary limit on what the drug plan will pay for drugs. Also in 2011, the Maryland General Assembly (MGA) made plans to eliminate prescription drug benefits in 2020 for State retirees who were age 65 or disabled, as those retirees could enroll in Medicare Part D.
Ultimately, the donut hole was eliminated early, so the Maryland Department of Budget and Management (DBM) advised retirees in May 2018 that prescription drug benefits would be canceled effective January 2019. In September 2018, a group led by Ken Fitch sued the State. One person makes a difference, and he deserves much credit for this. In response to the lawsuit, U.S. District Court Judge Peter Messitte granted an injunction in October 2018 to continue retiree prescription benefits. The injunction is the only reason retirees have had prescription drug benefits beginning January 2019.
The 2019 MGA session passed SB946, which would take effect upon the State's successful resolution of the court case. More on that later.
In December 2021, Judge Messitte determined there were four groups who began employment before July 2011:
1) Retired before July 1, 2011;
2) Retired between July 1, 2011 and December 31, 2018;
3) Retired on or after January 1, 2019; and
4) Active employees.
The judge allowed a breach of contract claim to proceed for groups 1 and 2, (those who retired by December 31, 2018), but he dismissed groups 3 and 4 (those retiring on or after January 1, 2019). The rationale was that prescription drug benefits were not being offered to retirees beginning January 1, 2019, and active employees had not yet vested (the judge said retirees vest upon retirement).
At this point, AFSME appealed for groups 3 and 4.
In February 2023, the United States Court of Appeals (Judge Stephanie Thacker et al.) ruled against the Union representing groups 3 and 4, but the decision was for a different reason - the court determined that there was no contract.
So, now we have two different courts, with two different decisions. The District Court says there was a contract for groups 1 and 2, but the U.S. Court of Appeals says there was NOT a contract for groups 3 and 4.
On June 29, 2023, the District Court Judge Messitte heard arguments regarding the State's motion for summary judgement (dismiss the case) and to dissolve the preliminary injunction. Deborah Hill, the attorney for Fitch, promised to appeal. The judge deferred his decision that day and asked for more information to be submitted by the end of July. On July 19, 2023, Judge Messitte decided the injunction should end, but deferred his decision on summary judgement.
SB946 takes effect upon the State's successful resolution of the case. Under SB-946, retirees would be removed from the State plan and enrolled in Medicare Part D.
Due to the Inflation Reduction Act (IRA), in 2025 the Medicare Part D out-of-pocket limit will be reduced to $2,000 per retiree. That is a significant reduction. Prior to the IRA, there was no out-of-pocket limit. But, the Medicare plan is an individual plan, and the 2025 out-of-pocket limit of $2,000 applies to each individual, so for a couple the limit would be $4,000.
However, the current State plan is a family plan. Individual retirees’ out-of-pocket costs are limited to $1,500, and families’ out-of-pocket costs are limited to $2,000.
SB946 will reimburse out-of-pocket prescription costs exceeding $1,500 for retiree only/ $2,000 for retiree and family. The method for reimbursement has not been disclosed yet, but, SB946 only protects some of the retirees from the loss of prescription benefits. The out-of-pocket limit in SB946 only applies to those who retired on or before January 1, 2020.
Those who retired after January 1, 2020, are left out, even though some have worked for the State 40 or 50 years. If both spouses in a family have the misfortune of getting sick and needing costly prescriptions, they may need up to $4,000 in out-of-pocket funds per year under Medicare Part D. Search the internet for DBM SB946 for more information.
That's a lot of money!
Upcoming changes for retirees under Medicare-only
-Retirees must review their plan each year. Many plans change premiums, deductibles, and formularies (drug lists) each year. On the state plan retirees have one plan to choose from, it's the same plan each year, or any changes are handled by DBM. Under Medicare some will pay less, but most will pay more.
-Medicare is an individual plan, the state plan is a family plan. This affects out-of-pocket costs. Each Medicare eligible retiree must choose a plan. A married couple must choose their plans separately.
-Under Medicare in 2025, each individual has an out-of-pocket cap of $2,000. Before 2025 there was no cap. Under the state plan, out-of-pocket is capped at $1,500 for a retiree and $2,000 for a married couple/family. Under Medicare a married couple may pay up to $2,000 each out of pocket or $4,000.
-Medicare has a deductible. The state plan has no deductible. A couple will have two deductibles (unless the retiree chooses a plan with a higher premium without a deductible).
-Each plan has a formulary. Retirees list drugs they are taking when choosing a plan, but their doctor might prescribe a drug that is not on the formulary of the plan the retiree chose. Retirees would have to pay for the drug for the rest of that year, until they can choose a plan that covers it the following year. This is not an issue with the state plan. State coverage is better. The Silver Script Plan that retirees use now may not be available as an individual plan.
- Retirees must use the preferred pharmacy for the plan they choose. There is in network and out of network and then there is the preferred pharmacy. (The preferred pharmacy might be a chain, e.g., Walgreen's). You must use the preferred pharmacy for the best price. The state plan does not require retirees to use a preferred pharmacy.
Why would the State impose this added cost which will affect those in poor health the most? Only the Maryland General Assembly (MGA) knows. The State promised these retiree prescription benefits to employees when hired before July 2011. Employees have fulfilled their part of the promise and worked the required years to earn the benefits. Why would the State require a certain amount of work years to earn the benefits if the State had no intention to fulfill the promised benefits? Retirees want answers.
Retirees want the State to keep its promise! It's time to fix this the right way. All retirees (and those who have yet to retire) who began working before July 2011, when the State decided to stop offering retiree prescription benefits to new employees, should be grandfathered in and continue to receive benefits.
The redistricting and election in 2022 caused confusion leading up to the January 2023 MGA session. We did not know our district until mid-year, nor who our representatives would be until after the election in November. No one in the 2023 MGA session introduced a bill to reinstate Medicare-eligible retiree prescription drug benefits. There was not much chance that legislators would make it right for retirees. MGA legislators have stated all along that they couldn't do anything until the court case is settled. If it is settled soon, that would eliminate their main excuse, the court case. And, it would add an incentive for legislators to make it right.
On the contrary, this year, 2023, is not a redistricting year, nor an election year. We do know who our representatives are and well before the January 2024 MGA session. Retirees can begin contacting their representatives as soon as the court case ends or even now.
The best response would be for retirees to raise their voices to every MGA representative this year well before the beginning of the January 2024 MGA. The MGA will have time to fix this the right way, and that would be to grandfather in all those who began their employment before July 2011 - retirees and current employees.
Contact your representatives today!