Buying short-term coverage in Delaware
- During October 2018, Delaware does not yet have state-specific regulations on short-term plans, and plans following the new federal rules are available for purchase.
- But the state has drafted regulations that will limit the plans to three months and prohibit renewal as of November 2018.
- Additional rate filings have been put on hold until the new regulations are finalized.
- At least seven insurers offer short-term plans in the state.
Delaware will have regulations to limit the duration of short-term plans by November 2018
Until October 2, 2018, federal regulations limited short-term health insurance plans to no more than three months in duration, and prohibited renewals. The Trump Administration is allowing for much longer short-term plans as of October 2018, unless a state imposes its own restrictions.
Delaware does not yet have state-specific regulations for short-term health insurance plans, but the Delaware Insurance Department noted in August 2018 that it was “conversing with other nearby states to inquire what regulations they have adopted” in terms of short-term health plans, and was beginning the process of drafting their own regulations. The regulations had been completed in mid-October, but the Department noted that they wouldn’t be publicly posted until November 1, but clarified that the regulations will limit short-term plans to no more than three months and prohibit renewals.
How long can short-term plans last in Delaware?
Until state-based regulations are finalized, the new federal regulations (which allow longer short-term plans) apply in the state, and there are plans available for purchased with 6-month and 12-month durations. But the Delaware Insurance Department has placed new rate/form filings on hold until the state’s regulations are finalized.
The state’s new regulations are expected to be posted on November 1, 2018. At that point, short-term plans will officially be limited to three months, as they were under federal regulations in 2017 and 2018.
ACA-compliant rate filings initially included a load for short-term plan expansion, but it was removed in subsequent filing
Highmark Blue Cross Blue Shield of Delaware is the only insurer that offers ACA-compliant individual market plans in Delaware’s health insurance exchange. Highmark’s initial rate filing for 2019 noted that the carrier had “included a 1% load for expected adverse selection due to the Short Term Limited Durational Insurance market expansion based on a recently proposed HHS rule modifying federal requirements.” [since short-term plans really only work for relatively healthy applicants (pre-existing conditions aren’t covered and can result in an application being rejected), the risk pool for ACA-compliant plans was expected to worsen somewhat in 2019 if the state had allowed short-term plans to become a long-term substitute for ACA-compliant coverage.]
But a subsequent filing, submitted in July 2018, included a smaller overall rate increase, and the Delware Insurance Department has confirmed that the proposed premium increase due to the expansion of short-term plans was not included in the revised filing (and the Insurance Department ultimately approved an even smaller rate increase than Highmark had proposed in the revised filing).
Which insurers offer short-term coverage in Delaware?
- Companion Life
- Everest Prime
- Golden Rule/UnitedHealthcare
- Independence American Life
- Standard Life
In 2016, Delaware’s Insurance Commissioner fined Companion Life $487,000 for “numerous violations of Delaware’s insurance code, including misrepresenting its limited benefit and short-term health insurance plans as compliant with the Affordable Care Act.”
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.