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Two new insurers join the Delaware exchange for 2023
Delaware’s health insurance exchange – Choose Health Delaware – is operated in partnership with the federal government, so residents use HealthCare.gov to enroll in coverage. From 2018 through 2022, Highmark was the only insurer offering exchange plans in Delaware. And since 2021, Delaware had been the only state with just a single insurer offering exchange plans.
But for 2023, Aetna is rejoining the exchange (after leaving at the end of 2017) and AmeriHealth is also joining, bringing the number of participating insurers to three.
Delaware’s exchange is a partnership between the state (Choose Health Delaware) and HHS, with residents enrolling through HealthCare.gov. Delaware is responsible for plan management and consumer assistance while the federal government handles all other functions.
The open enrollment period for individual/family health coverage runs from November 1 through January 15 in Delaware. Outside of open enrollment, a qualifying event is necessary to enroll or make changes to your coverage. If you have questions about open enrollment, you can read more in our comprehensive guide to open enrollment.
For 2023, three insurers will offer plans in Delaware’s exchange:
Aetna and AmeriHealth are both new for 2023. From 2018 through 2022, Highmark was the only insurer that offered exchange plans in Delaware, after Aetna exited the state’s market at the end of 2017.
For 2021 and 2022, Delaware was the only state in the country with just one participating exchange insurer (there were partial areas of other states with just a single insurer offering plans). Although Aetna rejoined the marketplaces for 2022 in several states where they had previously exited, they did not rejoin Delaware’s marketplace at that point. But they are rejoining as of 2023, with plans available for purchase as of November 2022.
For 2023 coverage, Highmark has proposed an average rate increase of 5.5% (note that none of this proposed rate increase had anything to do with whether the American Rescue Plan subsidy enhancements would continue, so it did not need to be adjusted after the Inflation Reduction Act was enacted). The two new insurers don’t have any applicable rate changes, since their plans will be new for 2023.
The proposed rates are under review by state regulators and will be finalized before the start of open enrollment for 2023 coverage.
Average rate changes only tell part of the story, however. They don’t account for premium subsidies, which offset premium costs for the majority of Delaware’s exchange enrollees. They also don’t account for the fact that premiums increase with age, even if an insurer doesn’t increase its overall average rates. For perspective, here’s a look at how premiums have changed in Delaware’s exchange in prior years:
During the open enrollment period for 2022 coverage, 32,113 people enrolled in medical insurance plans through Delaware’s health insurance marketplace. This was by far a record high for the state’s exchange, driven in large part by the American Rescue Plan‘s subsidy enhancements (which have been extended through 2025 under the Inflation Reduction Act).
In line with most other states, Delaware’s exchange enrollment had dropped each year from 2016 through 2019. But enrollment began to trend back up again in 2020, driven in part by Delaware’s new reinsurance program (which resulted in lower premiums for people who don’t get premium subsidies, making coverage more affordable for that population).
Enrollment in individual market plans through Delaware’s exchange has reached the following totals during open enrollment each year:
Although enrollment in the exchange dropped about 20% from 2016 through 2019, Delaware’s 1332 waiver proposal noted that total individual market enrollment in the state (including on-exchange and off-exchange enrollment) had dropped by 37% in that same time period.
Off-exchange enrollees don’t get premium subsidies, but the state’s new reinsurance program has made their coverage more affordable, potentially resulting in enrollment gains outside the marketplace as well. But it’s noteworthy that the American Rescue Plan has temporarily eliminated the “subsidy cliff” (income cap on subsidy eligibility), and the Inflation Reduction Act has extended that through 2025. So for the time being, there are fewer people who don’t qualify for subsidies, since subsidy eligibility now extends to higher income levels.
In August 2019, Delaware Governor John Carney signed SB35, codifying various ACA consumer protections into Delaware state law and joining several other states that have taken similar action over the last few years.
Although the ACA remains the law of the land, Delaware’s new law ensures that if the ACA is ever repealed or changed, its consumer protections will remain in effect in Delaware.
This includes provisions such as guaranteed-issue coverage (regardless of medical history), coverage for essential health benefits, a ban on lifetime and annual benefit maximums, limits on out-of-pocket costs, and rules regarding the factors that insurers can use to set premiums. Governor Carney also signed legislation that ensures adult Medicaid enrollees in Delaware will have dental coverage.
In June 2019, Governor Carney signed HB193 into law, paving the way for Delaware to create a reinsurance program in order to stabilize the state’s individual insurance market. The legislation called for an assessment on insurers in the state, plus federal pass-through funding to cover the cost of the reinsurance program.
Reinsurance programs work by paying a portion of high-cost claims, which reduces costs for insurers:
Because their claims costs are lower, insurers can charge lower premiums. This results in higher enrollment among people who have to pay full price, and it also means that the federal government spends less on premium subsidies, as the subsidies don’t have to be as large in order to bring net premiums down to an affordable level.
States can use a 1332 waiver in order to request pass-through funding, which means the state (instead of the federal government) gets to keep the savings that result from the premium subsidies being smaller. The state then uses that money to fund the reinsurance program. Numerous states have implemented reinsurance programs over the last couple of years, and have seen improvement in their individual markets as a result.
Delaware estimated that the reinsurance program would cost about $44 million in 2020, and that 80% of that would be covered by the federal pass-through funding, with the state generating the other 20% via a health insurer assessment. CMS determined that Delaware’s pass-through funding would amount to $21.7 million in 2020, which was less than the state had initially projected. But the pass-through funding for 2021 came to nearly $39 million. And for 2022, the pass-through funding amounted to $35 million.
With the reinsurance program in place, Delaware projected that premiums in the individual market to be 13.7% lower in 2020 than they would otherwise have been, and that enrollment in the individual market would increase by as much as 2.3%, thanks to smaller premiums for people who don’t get premium subsidies (for those who do get subsidies, the subsidies shrink commensurately with the cost of the benchmark plan). As noted above, overall average premiums decreased by 19% in Delaware in 2020.
Reinsurance is much less important now that the American Rescue Plan has eliminated the income cap for subsidy eligibility. And the Inflation Reduction Act has extended that provision through 2025. This means fewer people are ineligible for subsidies, and reinsurance programs directly benefit those who are ineligible for subsidies.
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 did 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.
Delaware is one of several states that have taken steps to limit patients’ out-of-pocket costs for prescription drugs. Delaware law limits specialty drugs to $150/month copays or coinsurance. The regulations apply on and off-exchange, and to employer-sponsored plans that are regulated by the state (self-insured plans are regulated by the federal government under ERISA instead). And Delaware insurance plans are not allowed to designate all drugs in a particular drug class as specialty drugs, so patients shouldn’t have a situation in which their only available drugs are specialty drugs.
Delaware HB263, enacted in July 2020, caps out-of-pocket costs for insulin at $100 per month on all individual and group plans that are regulated by the state of Delaware (note that states to not regulate self-insured group plans). Plans are also required to include at least one insulin product in the lowest tier (ie, least expensive) of the plan’s covered drug list. The rule took effect for plans issued or renewed after the end of 2020.
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, an estimated 18,000 people would have lost their subsidies in Delaware.
And statewide, 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, Arkansas, Kentucky, and New Mexico use that model as of 2019, 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). At that point, Delaware was the only state with a Democratic governor and Democratic majority in both congressional chambers that didn’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.
Choose Health Delaware 800-318-2596 HealthCare.gov 800-318-2596 Health Benefit Exchange information Exchange information from the Delaware Health Care Commission Who Serves on 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.
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