Highlights and updates
- Looking ahead to 2019: Cost of CSR being added to silver plans (no more broad load)
- Average rate increase for 2019 just 3 percent
- Aetna exited at the end of 2017; Highmark offering coverage for 2018
- Year over year enrollment down about 11% for 2018
- Highmark raising prices average of 25%
- Rate hike based on elimination of CSR funding, lack of mandate enforcement
- Cost of CSR was added to plans at all metal levels, not just silver
Delaware exchange overview
Delaware’s exchange is a partnership between the state (Choose Health Delaware) and HHS, with residents enrolling through Healthcare.gov. Two health insurance companies offered coverage in the exchange in 2017, but that dropped to just one — Highmark BCBS of Delaware — in 2018. Highmark already covered more than half of Delaware’s exchange enrollees as of 2017, but nearly 12,000 people with Aetna coverage had to select new plans from Highmark for 2018.
Oklahoma, South Carolina, Wyoming, Alabama, and Alaska had just a single carrier in their exchanges for 2017. Alabama gained a second insurer for 2018, but several other states have dropped to just a single exchange insurer for 2018, including Delaware (as well as Iowa, Mississippi and Nebraska). In addition, there are numerous areas of the country in other states that have only one exchange insurer offering plans, since insurers often offer coverage in localized areas within a state.
Looking ahead to 2019: Highmark is silver loading instead of broad loading
Delaware was one of five states where the cost of cost-sharing reductions (CSR) was added to premiums for plans at all metal levels in 2018, rather than just silver plan premiums. For 2019 coverage, the rate and form filing submission window in Delaware ran from May 9, 2018 to June 20, 2018.
In early May, the Delaware Department of Insurance stated that they didn’t yet know what approach Highmark was planning to take for 2019, in terms of how the cost of CSR would be added to premiums. And by late June, the Department of Insurance and Highmark were both still keeping the CSR loading strategy under wraps, noting that they weren’t yet ready to disclose how the issue would be handled for 2019.
In April, the Department of Insurance published an extensive guide to 2019 rate and form filing submissions, but it did not address the CSR loading issue. The Department of Insurance clarified that they were not leaving the decision entirely up to Highmark, and have been involved in numerous meetings with the insurer about 2019 coverage.
Highmark, which also offers coverage in the exchanges in Pennsylvania and West Virginia, recorded their first profitable year in the ACA-compliant market in 2017, after losing a billion dollars in the ACA-compliant market from 2014 through 2016.
When the rates were publicized in early August, Highmark had requested a 5.7 percent average premium increase for 2019 (notably, however, their proposed rate increase that shows up on ratereview.healthcare.gov is 13 percent). And when the Delaware Department of Insurance published final rates later in August, the approved average rate increase for Highmark was just 3 percent.
In addition, the final rate approval notice clarifies that the cost of CSR is being added only to silver plan rates for 2019, as opposed to the broad load strategy that was used for 2018.
2018 enrollment 11% lower than 2017 enrollment
24,500 people enrolled in plans through the Delaware exchange during open enrollment for 2018 coverage. That was about 11 percent lower than the 27,584 people who had enrolled the year before, but open enrollment was only half as long for 2018, ending on December 15 instead of continuing through January. The Trump Administration also reduced funding for exchange marketing and enrollment assistance before the start of open enrollment for 2018 coverage, and consumers were uncertain about the status of the ACA’s individual mandate (the penalty was repealed after open enrollment ended, but that repeal doesn’t take effect until 2019).
Together, those factors resulted in lower overall enrollment across the states that use HealthCare.gov. But the average decrease in enrollment was about 5 percent, so Delaware had a bigger percentage drop that most states. In Delaware, an additional factor was the exit of Aetna at the end of 2017, leaving nearly 12,000 people who had to switch to Highmark for 2018.
Coverage for 2018 is now only available for people who experience a qualifying event (this is true in every state, and also applies outside the exchange). But some qualifying events only trigger a special enrollment period for people who already had coverage prior to the qualifying event, and HHS requires everyone enrolling as a result of a qualifying event to provide proof of the qualifying event before the application can be completed.
2018 coverage: Aetna out, Highmark left as the only insurer; 25% average rate increase included adding cost of CSR to all premiums.
Insurers that wished to offer individual market plans in Delaware in 2018 had to file rates and plans with the Delaware Department of Insurance by June 9, 2017. Highmark Blue Cross Blue Shield of Delaware had the majority of the market share in the state’s exchange in 2017, and they are the only available option in 2018.
Aetna confirmed in May 2017 that they planned to exit all four of the exchanges where they offered coverage in 2017, including Delaware, at the end of the year. The Delaware Department of Insurance reported that Aetna insured 11,854 people on exchange plans in 2017 (about 42 percent of the exchange enrollees), all of whom needed to pick a new plan for 2018.
In response to Aetna’s market exit announcement, Trinidad Navarro, Delaware’s Insurance Commissioner, said “I would hope that our elected officials in Washington will come up with solutions to guarantee that health insurance in Delaware and elsewhere is both available and affordable. Continuing funding for Cost-Sharing Reductions is a first step in the right direction.”
The Trump Administration’s lack of commitment to funding the ACA’s cost-sharing reductions (CSR) was a driving factor in the rates that insurers filed for 2018. Insurers in most states — including Delaware — added the cost of CSR to premiums for 2018. That ended up being a prescient decision, as the Trump Administration announced in mid-October that CSR funding would end immediately.
Highmark initially proposed an average rate increase of 33.6 percent, but ultimately agreed to a 25 percent average rate increase in October. Their rate filing notes that the average rate increase would have been about 16.8 percent if CSR funding had continued and if the federal government was robustly enforcing the individual mandate.
In April 2017, Kaiser Family Foundation estimated that in Delaware, the average price of a silver plan would have to increase by 11 percent (in addition to whatever increase would otherwise be necessary) if CSR funding were to be eliminated. This was on the lower end of the spectrum — KFF’s average projected increase in silver plan rates across all HealthCare.gov states was 19 percent. Highmark noted that about 7.2 percentage points of their average rate increase was due to the lack of CSR funding as well as the lack of enforcement of the individual mandate (that’s averaged across all plans, though, including the other metal levels).
Highmark’s rate filing didn’t specifically state whether they added the cost of CSR to all plans or only to silver plans, although the Delaware Department of Insurance confirmed that the cost of CSR was added to premiums at all metal levels. And Highmark’s rate template indicated that average rate increases for all of their plans were in a very narrow range of about 23 – 26.5 percent, with the average increase for silver plans is roughly the same as the average increase for plans at other metal levels.
Highmark is offering one gold plan, three silver plans, two bronze plans, and one catastrophic plan. A 45-year-old in New Castle County who earns $25,000 in 2018 can get a bronze plan for less than seven dollars a month after premium subsidies, which is similar to what we see in states that added the cost of CSR to silver plans (ie, larger premium subsidies, making bronze plans very inexpensive after subsidies). However, there’s also a substantial after-subsidy price difference between silver and gold plans, with the gold plan costing nearly twice as much as the highest-priced silver plan ($270/month for gold, versus $120-$147/month for silver). This is consistent with what we’ve seen in the other states that opted to add the cost of CSR to all plans, as silver plans didn’t increase in price by a disproportionately larger amount than gold plans.
Highmark has about 91,600 members enrolled in exchange plans across Delaware, Pennsylvania, and West Virginia (including all of the exchange enrollees in Delaware, since Highmark is the only insurer offering exchange plans in the state. That’s down from about 350,000 exchange enrollees in those three states in earlier years of exchange implementation, when the insurer was actively pursuing that market. But amid concerns about financial losses in the exchange markets, Highmark scaled back, reduced network sizes, and generally became much less aggressive in their approach to exchange market share. In 2017, however, for the first time, Highmark made money on its exchange business, after losses in the prior years. Exchange plans make up a tiny fraction of the insurer’s overall book of business, which includes 4.6 million members.
Open enrollment for 2017 coverage began on November 1, 2016, and continued until January 31, 2017. By the end of open enrollment, 27,584 people had enrolled in private plans through the Delaware exchange. That’s slightly lower than the 28,256 people who enrolled the year before; lower enrollment was common in 2017 — particularly among states that use HealthCare.gov — due in part to the uncertainty surrounding the future of the ACA under the Trump Administration, and the Trump Administration’s move to reduce marketing and outreach for HealthCare.gov in the final week of open enrollment.
There are two companies that offer health insurance through Delaware’s exchange: Aetna and Highmark Blue Cross Blue Shield of Delaware. Aetna has a PPO division and an HMO division, which are listed as separate entities for rate filings. Although Aetna exited the exchanges at the end of 2016 in most of the states where they had been participating, Delaware was one of four states where continued to offer exchange plans in 2017. But they are exiting all four states at the end of 2017.
The approved average rate increases for 2017 were:
- Aetna Health (HMO): 23.6 percent
- Aetna Life (PPO): 22.8 percent
- Highmark BCBS of Delaware: 32.5 percent
A public comment period on the proposed rates ran through July 15, 2016. The rates that were approved were very similar to what the carriers had requested when they originally filed rates for 2017.
Initially, Delaware Insurance Commissioner Karen Weldin Stewart had approved a lower-than-requested rate for Highmark, and forwarded that on to CMS for review. But in light of the carriers opting to leave exchanges in numerous states around the country, CMS urged Delaware to accept Highmark’s initial rates, and the state agreed. As a result, no carriers left the Delaware exchange at the end of 2016, while most other states saw at least some insurers exit their exchanges.
Higher subsidies offset the bulk of the rate hikes for exchange enrollees who are subsidy-eligible. In 2016, nearly 85 percent of Delaware exchange enrollees are receiving subsidies.
Enrollment 11% higher in 2016
For comparison, a total of 25,036 people enrolled in plans through the Delaware exchange in the 2015 open enrollment period, and 23,163 people had in-force private plan coverage through the exchange as of mid-2015.
Average subsidies increase 24%
Although rates increased significantly for 2016, premium subsidies offset much of the rate hike. As of March 31, almost 85 percent of enrollees were receiving premium subsidies.
Statewide, the average cost of the second-lowest-cost silver plan (benchmark plan) in 2016 is 18.3 percent more expensive in 2016 than it was in 2015. Subsidies are based on the cost of the benchmark plan, so subsidy amounts are also higher in 2016.
For people who enrolled during open enrollment and qualified for subsidies in the Delaware exchange, the average pre-subsidy premiums were $477/month. But after subsidies, they pay an average of just $150/month; the subsidies cover the remaining $328/month (as of March 31, the average subsidy was $330 per month after accounting for early attrition). That’s a 24 percent increase over the average subsidy of $264/month in 2015.
The average after-subsidy premium of $150/month in Delaware is considerably higher than the $106/month average across all states that use Healthcare.gov. But six other states on the platform have higher after-subsidy premiums. And it’s important to remember that higher average after-subsidy premiums reflect either higher average incomes for enrollees (likely playing a role in Delaware, which was ranked 11th in per-capita income in 2014), or more robust plan selections by enrollees. If people with equal incomes choose the benchmark plans, their premiums will be very consistent from one state to another.
On September 29, 2015, Insurance Commissioner Karen Weldin Stewart announced final rates for 2016, after vowing earlier in the year that the Insurance Department in Delaware would “vigorously examine” the 2016 rate proposals they received from the state’s two exchange insurers, hoping to find ways to reduce the final rates.
- Highmark Blue Cross Blue Shield of Delaware initially requested an average rate increase of just over 25 percent in the individual market, although they increased their proposed rate increase to 33 percent in August. State regulators ultimately approved a 22.4 percent average rate increase for Highmark’s individual market plans, and Highmark had almost 95 percent of the individual market share in Delaware, including both on and off-exchange enrollments.
- Aetna proposed raising rates by an average of nearly 17 percent for 2016, which was approved by regulators.
In 2014, Highmark garnered more than 90 percent of the exchange market share. For 2015, they proposed a rate increase of 5 percent, but ended up reducing it to 4 percent instead. As of the end of January 2015, Highmark had nearly 30,000 individual enrollees in Delaware, including the off-exchange market. Their significant rate increase for 2016 didn’t seem to impact their market share, as it was still at about 30,000 people (on and off-exchange) with paid-up plans as of February 25, 2016.
It was important for enrollees to shop around during open enrollment and see if a different plan might present a better value for 2016 (the nearly 22 percent weighted average rate increase assumed that everyone kept their existing plan going into 2016). But since average rates increased on all of the plans sold in the Delaware exchange, premium subsidies are also higher in 2016, and mitigate much of the premium increase for enrollees who are receiving subsidies.
Delaware’s Insurance Commissioner is in ongoing talks with other insurance carriers in an effort to add carriers to the Delaware marketplace in future years and increase competition and options for the state’s consumers. Freedom Life, Celtic, National Foundation Life, and Golden Rule all offer plans in Delaware (rate change information for all of them is available on Healthcare.gov’s rate review page), but only outside the exchange.
No discrimination against transgender enrollees
In March 2016, Delaware became the 15th state to prohibit health insurance companies from discriminating against transgender enrollees. The rules apply both on and off exchange, and in the individual and group market.
The bulletin issued by Insurance Commissioner Karen Weldin Stewart specifically notes that while the plan that constitutes the Essential Health Benefits benchmark plan in Delaware for 2016 does have an exclusion for “change of sex surgery” (except for correcting a congenital defect), the bulletin detailing the ban on transgender discrimination supersedes the benchmark plan design, and that insurers may not issue such a blanket exclusion.
Capped prescription costs
Delaware is one of several states that have taken steps to limit patients’ out-of-pocket costs for prescription drugs. Senate Bill 35 (passed in 2013, effective January 1, 2014) limits specialty drugs to $100/month copays, with a maximum of $200/month in total specialty drug costs per patient. The regulations apply on and off-exchange, and to employer-sponsored plans.
Delaware opts to stay with federally-run exchange
In the months leading up to the Supreme Court’s 2015 ruling on King v. Burwell, Delaware devised a back-up plan. Because Delaware uses the federally-run marketplace (the state has a partnership exchange, which is a variation of the federally-run exchange), subsidies were in jeopardy in the state. 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.
To avoid that outcome, the state submitted a proposal for transitioning from a state-federal partnership exchange to a federally-supported state-based marketplace (Oregon, Nevada, Hawaii, and New Mexico currently use that model, with state-run exchanges that utilize Healthcare.gov for enrollment). And on June 15, 2015, HHS issued conditional approval for Delaware’s plan (Pennsylvania and Arkansas also got conditional approval for state-run exchanges as contingency plans in case the Court had sided with King).
Delaware is the only state with a Democratic governor and Democratic majority in both congressional chambers 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.
But then on June 25, the Supreme Court ruled that subsidies are legal in every state, including those that use the federally-run marketplace, meaning that subsidies would continue to be available in Delaware regardless of whether the state runs its own exchange. Initially, it was unclear whether Delaware would 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 would continue to evaluate the possibility of transitioning the exchange, and make a decision later in the summer.
But in August 2015, Delaware officials announced that they would continue to operate as a state-federal partnership exchange, noting that it would be more cost-effective than operating their own exchange.
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 Family Foundation, 52 percent of the state’s potential pool of 48,000 individuals signed up for coverage.
Some enrollees didn’t pay their initial premiums though, and some opted to cancel their coverage early in the year. By the end of March, effectuated enrollment through the Delware exchange stood at 22,397 people. Nationwide, effectuated enrollment declined during the second quarter of 2015, but in Delaware it increased. By the end of June, 23,163 people had in-force coverage through Delaware’s exchange. 84 percent of them were receiving premium subsidies, and 44 percent were receiving cost-sharing subsidies to reduce their out-of-pocket exposure.
Delaware official opted to expand Medicaid under the ACA, and Medicaid enrollment in the state has increased by 9 percent from 2013 to January 2016. But the overall uninsured rate in the state hasn’t shifted significantly, according to data from a Gallup survey. In 2013, the state’s uninsured rate was 10.5 percent (lower than average), but it had only dropped to 9.9 percent by mid-2015 (the decline is within the margin of error for the sample).
Plenty of help available from Choose Health Delaware
Delaware received a $600,000 federal grant to fund in-person assistance with 2015 enrollment, and received the same amount again in 2015 to fund enrollment assistance for 2016. 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 offered individual policies through the exchange for 2015. Plans 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 showed 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 experienced double-digit increases, while 14 states saw double-digit decreases. For the nation, average premiums increased zero percent for 2015 — 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 delayed the launch of “employee choice” on the SHOP exchange, so it wasn’t available in 2015. 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 was one of 18 states that delayed implementation of employee choice until 2016.
For 2016, Delaware regulators approved a 12.7 percent average rate increase for Highmark’s small business plans, but they also approved a 6.1 percent average rate decrease for Aetna’s small group plans.
For 2017, the rate increases are somewhat reversed, with Highmark’s average percentage change much lower than Aetnas: Regulators approved a 2.74 percent average rate increase for Highmark’s small business plans, but a 15.2 percent increase for Aetna Life, and a 19.7 percent increase for Aetna Health.
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.
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.
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.