King v. Burwell – subsidies are safe
On June 25, the Supreme Court sided with the government in King v. Burwell, and subsidies are now safe in Delaware and the rest of the states that rely on the federally-run exchange.
If the King plaintiffs had prevailed, ACAsignups estimated that 18,000 people would have lost their subsidies in Delaware. And state-wide, the entire individual market would have seen spiraling premiums over the next few years as healthy individuals dropped coverage that became unaffordable without subsidies.
But Delaware had a back-up plan. The state submitted a proposal for transitioning from a state-federal partnership exchange to a federally-supported state-based marketplace (OR, NV, and NM currently use that model, with state-run exchanges that utilize Healthcare.gov for enrollment). And on June 15, HHS issued conditional approval for Delaware’s plan (PA and AK also got conditional approval for state-run exchanges as contingency plans in case the Court had sided with King).
Delaware is the only Democratic-controlled state that doesn’t have a state-run exchange, in large part because the state’s small population would make it financially difficult to sustain an exchange.
Now that subsidies will continue to be available regardless of how the exchange is structured, it’s not clear whether Delaware will continue with their plan to implement a supported state-based marketplace. The state issued a press release immediately after the King verdict was announced, stating that they will continue to evaluate the possibility of transitioning the exchange, and a decision will be made later this summer.
The Insurance Department in Delaware is preparing to “vigorously examine” the 2016 rate proposals they’ve received from the state’s two exchange insurers, hoping to find ways to reduce the final rates. Highmark Blue Cross Blue Shield of Delaware has requested an average rate increase of just over 25 percent in the individual market, while Aetna wants to raise rates by 16 percent (those are averages – the specific proposals for each plan are available at ratereview.healthcare.gov – and it’s important to note that rate changes are only displayed on that page if they’re 10 percent or more).
Nearly 25,000 Delaware residents signed up for a qualified health plan on HealthCare.gov between Nov. 15, 2014, and Feb. 15, 2015. According to Kaiser, 52 percent of the state’s potential pool of 48,000 individuals signed up for coverage.
Open enrollment for 2015 has ended, but special enrollment periods are also open to consumers who experience a qualifying event, such as getting married or having a child. Individuals must enroll or make changes to their coverage within 60 days of the event. Enrollment for Medicaid continues throughout the year, and Native Americans can also enroll year-round.
If you aren’t covered in 2015, you may have to pay a penalty: $325 per adult/$162.50 per child or 2 percent of the household income, whichever is more. However, there are caps on the total amount and numerous exemptions. Use the calculator on healthinsurance.org to see if you’ll be penalized if you skip getting covered in 2015.
Plenty of help available from Choose Health Delaware
Delaware received a $600,000 federal grant to fund in-person assistance with 2015 enrollment. Choose Health Delaware has marketplace guides available at more than 70 locations throughout the state, including hospitals and other healthcare facilities, libraries, state service centers, schools and college campuses, community agencies and churches. The exchange website includes a locator tool to help consumers schedule an appointment with a marketplace guide.
2015 insurers and rates
Two divisions of Aetna and Highmark Blue Cross Blue Shield are selling individual policies through the exchange for 2015. Plans being sold by Aetna were marketed as Coventry plans in 2014; Coventry was acquired by Aetna in 2013.
A study released in December 2014 by The Commonwealth Fund shows just a 3 percent increase in average marketplace premiums for Delaware between 2014 and 2015. The weighted analysis looked at rates across all metal tiers and in urban/suburban/rural areas of most states.
The Commonwealth Fund study found wide variations across the country. Ten states are experiencing double-digit increases, while 14 states are seeing double-digit decreases. For the nation, average premiums increased 0 percent — an amazing turnaround from the 10 percent or greater annual increases seen in the years immediately preceding the implementation of the Affordable Care Act.
How many people signed up in 2014?
According to Choose Health Delaware, 23,612 state residents enrolled in private insurance or Medicaid between October 2013 and November 2014.
During 2014 open enrollment, 81 percent of those enrolling in QHPs were eligible for premium subsidies. Among those who qualified for subsidies the average post-subsidy monthly premium was $130. That’s the third-highest average among states using the federal marketplace.
Delaware experienced a 0.9 point drop in its uninsured rate between 2013 and 2014, according to the Gallup-Healthways Well-Being Index. Delaware’s uninsured rate was 9.6 percent in 2014.
Delaware’s SHOP exchange
Delaware businesses with 50 or fewer employees can shop for health insurance online through the SHOP exchange on HealthCare.gov. However, enrollment expectation for the SHOP are modest.
Delaware is delaying the launch of “employee choice” on the SHOP exchange. Employee choice allows employees of small businesses that use the SHOP to select from a range of plans rather than being limited to a single plan selected by their employer. The federal government let states that use the federal marketplace choose if they want to implement employee choice for 2015. Delaware is one of 18 states that is delaying implementation of employee choice.
Delaware’s marketplace approach
The state’s health insurance marketplace is branded as Choose Health Delaware, and it is operated in partnership with the federal government. Delaware is responsible for plan management and consumer assistance while the federal government handles all other functions.
Several states adopted a partnership exchange as an incremental step toward an eventual state-run exchange. However, Delaware chose the partnership model as a financially prudent approach given its small population. Delaware officials also expressed interest in a potential regional exchange, whereby the state would partner with one or more other states. A regional partnership would spread administrative cost over a wider population and increase the size of the risk pool.
Leavitt Partners, a consulting firm, evaluated how Delaware and the other states may react to the King vs. Burwell case before the Supreme Court. According to Leavitt, Delaware would likely implement a state-run marketplace if the court rules that federal premium subsidies are not available in states that rely on HealthCare.gov.
Delaware health insurance exchange links
Choose Health Delaware
Health Benefit Exchange information
Exchange information from the Delaware Health Care Commission
State Exchange Profile: Delaware
The Henry J. Kaiser Family Foundation overview of Delaware’s progress toward creating a state health insurance exchange.