The state of Delaware will need at least an additional $50 million dollars in fiscal 2025 to pay for increases in the cost of employee health insurance, which is expected to see premium rises of up to 22%.
Ruth Ann Miller, controller general, said the program will have a shortfall of $15 million by April 1 and will need $22 million by June 30, the end of Delaware’s fiscal year 2024.
Miller on Thursday told the Legislative Council — a group comprised of the leadership of the House and Senate — that the insurance hike is just one example of an extra “door-opener” expenditure that will eat up the state’s ability to raise its annual budget 5.9%.
Other examples include $80 million from the Medicaid program in the Department of Health and Social Services and $40 million from the Department of Education.
“So very quickly all of those costs will eat up that allowable growth, ” Miller said.
Her office is waiting on Gov. John Carney’s proposed budget, which will be released Jan. 25, and then will send that to the Joint Finance Committee, a bipartisan committee of legislators who allot state money using the proposed budget as a base.
The state splits health insurance costs with its employees.
An employee’s personal cost for a premium could increase anyway from $91 to $887 per year, while the state’s split may be anywhere from $2,171 to $5,857 per employee.
The expected costs were calculated by the State Employee Benefits Committee, Miller said.
Miller said she and Cade Cerron, director of the state Office of Management and Budget, would be coming back to the Legislative Council with some suggestions on how to solve the insurance problem in this fiscal year.
Delaware’s annual budget limit is determined through a process called benchmarking, which allows Delaware to budget a specific amount to spend after first steering other monies into places such as the Rainy Day Fund.
Miller also said:
- Hearing notices for the agencies requesting money from the Joint Finance Committee have gone out. Those meetings start Jan. 30 and will be held every Tuesday, Wednesday and Thursday for four weeks, starting at 10 a.m. in the morning. The public is welcome to attend in person as well as to listen in or testify by Zoom.
- The state needs to do a mini bond bill this year. The bond bill committee will meet Thursday, Jan. 18, to discuss that.
- The Community Reinvestment Fund will open grant applications Feb. 15 and close May 15. Awards will be contingent on available funding.
- The Grant-in-Aid application period has ended, with the state receiving 356 applications. That’s up from the usual 310-315.
Betsy Price is a Wilmington freelance writer who has 40 years of experience.
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