Identifies Areas of Compliance and Opportunities to Continue Health Care Payment Transformation

Early in March, Insurance Commissioner Trinidad Navarro and Cristine Vogel, the Director of the Department’s Office of Value-Based Health Care Delivery, issued the Annual Review of Carrier Progress Towards Meeting Affordability Standards. Vogel leads the Department’s efforts relating to value-based care, primary care, pharmacy benefit managers, and other health-policy initiatives, including grant programs. After establishing affordability standards in 2021 and 2022, the Office collected data from insurance carriers concerning their projected compliance with the affordability standards for 2023, the first year of affordability standard implementation.

“The statutory charge of the Office is to “reduce health-care costs by increasing the availability of high quality, cost-efficient health insurance products with stable, predictable, and affordable rates,” said Commissioner Navarro. “I am pleased that overall, carriers project compliance with the affordability standards set by the Office.”

The 2023 projections show that carriers will increase their investment in primary care spending to seven percent of their total medical spend ($40 million) and will hit the mandated 8.5 percent of total spend toward primary care programs that have engaged in care transformation activities. This results in an $8 million increase from 2022. Additionally, carriers were required to limit price growth for hospital and other non-professional services increases to 5.5 percent. All carriers project compliance for each of the three required service categories – inpatient hospital, outpatient hospital, and other medical. A key finding of the Report is that the Office estimates these limits saved Delawareans $2 million to $12 million in 2023, depending on the price increases hospitals would have otherwise negotiated with carriers.

Critical to successful implementation of value-based care delivery programs, are carriers non-fee-for-service (FFS) reimbursement to primary care providers. Compliance with the affordability standards for does not require carriers increase payment equally across all providers, and therefore, the increased investment will generally lean toward larger practices already engaged in care transformation activities. Projections for 2023 show that on a per member per month (PMPM) basis, primary care investment has increased from $11 PMPM in 2022 to $29 PMPM in 2023 for those practices engaged in value-based care programs.

“Helping to bend the health care curve towards more affordable care is critically important in these times of ever-increasing hospital and medication prices,” said Commissioner Navarro. “The data in the 2023 Report make it clear to me that we can keep making progress toward higher-quality care at a lower cost.”

“Delaware continues to make progress in its innovative efforts to address care quality and cost,” said Director Vogel. However, she stressed that there is room for progress. Key challenges include the fact that the fully-insured portion of total health care spending is relatively small, carriers with low membership appear reluctant to design value-based programs, provider practices with low attributed members appear reluctant to invest in value-based infrastructure, and there is a lack of multi-payer program alignment (e.g., care delivery, payment, etc.).

Vogel also pointed out what she considers to be a critical challenge, namely that the Department regulates a small portion of the health insurance industry. “We regulate the fully-insured segment, which comprises only 10 percent of the total health insurance market and is therefore too small to drive change alone.” Vogel further commented, “we remain committed and engaged to collaborate with the industry to find ways to continue this great progress toward value-based care”.

An additional hurdle may come from a new strategy under consideration by carriers, namely, to separate hospital and physician fees for self-insureds from fully insureds. If this strategy were to be implemented, Vogel opined that the hospital price growth cap of CPI+1 would apply to only fully insured and not self-insured, as hospitals would not be held to the price growth cap for self-insured rates. Carriers and providers would need to re-think their care delivery approaches, since bifurcating the market will likely add administrative burdens and market inefficiencies.

Vogel continues to search for policy solutions. At the March 13th meeting of the Delaware Primary Reform Collaborative, she suggested that Delaware could consider ways to include additional payer types (e.g., Medicaid, self-funded) to increase the size of the market and result in more impactful results for value-based care programs. She is also seeking creative solutions for carriers with low membership counts to be able to offer non-FFS programs, opportunities to provide certain care transformation activities in a more “centralized” manner (for smaller practices) and expanding her Office’s ability to require financial amounts within categories of non-FFS activities. The Office is working on a supplemental report which will further explore these challenges and opportunities.

Experienced healthcare management strategist hired after lengthy national search

Insurance Commissioner Trinidad Navarro welcomed Cristine Vogel to the Delaware Department of Insurance as its Director of Value-Based Health Care Delivery this week after a lengthy national search to fill the role. As the inaugural Director, Vogel will lead efforts that relate to value-based care, primary care, pharmaceuticals and pharmacy benefit managers, affordability, and other health-policy initiatives including grant programs.

“It is more important than ever before to ensure the accessibility and affordability of healthcare and prescriptions,” said Commissioner Navarro. “Hospital prices, the cost of medications, and low-quality services all raise the price of consumer care and insurance coverage. With Cristine’s expertise on board, we can keep making progress toward higher-quality care at a lower cost.”

Director Vogel has been involved with healthcare management for over 25 years, with experience in hospitals and medical practices, state government, insurance, and consulting. Leading the Office of Value-Based Health Care Delivery, Vogel will establish, implement, and monitor Affordability Standards such as those to increase primary care investment, and manage the reporting of carrier investments in health care. This will include assessing commercial reimbursement rates for primary and chronic care services, the role of price and utilization in healthcare spending, and prescription drug spending as a driver of total cost of care.

“Delaware is taking on innovative efforts to address care quality and cost, and I’m proud to work with Commissioner Navarro to make these projects a success,” said Director Vogel.

Vogel most recently served as the Director of Population Health Initiatives for Nuvance Health System in Connecticut, where she developed solutions to improve clinical outcomes, increase quality of care, and control healthcare costs through implementing a nurse care management program, a clinical pharmacy program, and through integrating behavioral health within primary care practices. Her experience in healthcare reform also includes leading the State of Connecticut’s Office of Healthcare Access and evaluating Certificates of Need. The position, funded by the department, was made necessary by several legislative mandates related to healthcare affordability and pharmacy benefits.

Double-digit drop will be effective December 1

Insurance Commissioner Trinidad Navarro announced today that workers’ compensation insurance rates will decrease for the sixth year in a row, effective December 1, 2022. Both the voluntary market and the residual market will see rate decreases in the double digits.

“Lowering worker’s compensations costs time and time again helps our local businesses, who have faced several years of uncertainty and economic difficulty due to the pandemic,” said Insurance Commissioner Trinidad Navarro. “It also helps us to attract new companies and jobs to our state. While costs continue to decrease, companies are keeping their eye on the ball by reducing risk through programs like our Workplace Safety initiative.”

This year’s decrease in worker’s compensation insurance rates is expected to be coupled with the reversal of voluntary and residual market trends – the residual market is expected to see a greater rate decrease. Residual insurers provide ‘last resort’ coverage for companies unable to obtain or afford coverage in the traditional market. Generally, rates in the residual market do not decrease more than the voluntary market, as the clientele tends to be businesses with higher risk or claims history. The reduction seen in the residual market is an indicator that these policies are being used less frequently, as companies can better afford the traditional, voluntary market.

Workers’ compensation insurance provides coverage when an employee is hurt on the job and can provide medical coverage as well as payments for lost wages if a person is unable to work due to their injury. Lower premiums don’t change the amount of compensation an injured employee receives.

Final rates are expected to be announced in early November, following a review of the Delaware Compensation Rating Bureau (DCRB) filing by independent actuaries, and a public hearing with DCRB and the State’s Ratepayer Advocate. Actual savings will vary by policy.

These lower rates are just one component of several Department efforts to help businesses financially. More than 1,200 employers are saving even more money on their workers’ compensation premiums by participating in the department’s Workplace Safety Program, saving approximately $7.4 million last year. Eligible businesses can earn up to a 19% discount on their insurance by successfully undergoing annual safety inspections and complying with recommendations. Importantly, employees may also benefit directly from employer-based safety goals – for example, a workplace may offer bonuses if there are no injuries in a given timeframe and pass on the savings to workers.

Businesses eligible for the Workplace Safety Program are notified each year seven months prior to their renewal date. Organizations interested in participating can access questionnaires online and contact safety@delaware.gov to begin the process. For the first time in 20 years, the Department will update the Inspection Fee Schedule for program participants. Businesses will be notified accordingly. Only benefits can be gained by participating, failure to qualify cannot be the basis for premium increases or sanctions imposed by other safety officials.

Update as of November 2, 2022: Following a review of the Delaware Compensation Rating Bureau (DCRB) filing by independent actuaries and a public hearing with DCRB and the State’s Ratepayer Advocate, the final Workers’ Comp rates have been approved.
Residual Market: Average decrease of 19.72%
Voluntary Market: Average decrease of 14.76%

View the DCRB website

Free one-on-one counseling saved consumers more than a half million dollars in 2021

As the October 15 to December 7 Medicare Open Enrollment quickly approaches, the Delaware Department of Insurance and its Medicare Assistance Bureau (DMAB) are sharing their annual consumer information announcement.

During Medicare Open Enrollment, consumers can join, switch, or drop a Medicare Prescription Drug Plan (Part D) or Medicare Advantage Plan. DMAB’s free, confidential, unbiased one-on-one assistance can help residents determine if making a coverage change is the right choice. In 2021, DMAB provided more than 5,500 counseling sessions, saving beneficiaries a combined $521,000.

The department does not manage benefits offered to state employees, pensioners, or spouses. While DMAB can counsel Medicare-eligible state plan members, questions about the state’s Medicare Advantage plan or transition should first contact the Office of Pensions at 1 (800) 722-7300 and explore their online guide. Medicare Advantage plans themselves are regulated at the federal level, though the Insurance Commissioner and his peers are advocating for increased state regulatory authority.

“Our Medicare Assistance Bureau is an important resource for residents. Many Delawareans face confusion when it comes to Medicare Advantage plans, and as Open Enrollment approaches, they will begin to see an influx of television commercials and be targeted by a lot of other enrollment marketing,” said Insurance Commissioner Trinidad Navarro.

DMAB Director Lakia Turner agreed. “Many beneficiaries enroll in plans based on marketing, without fully assessing the plan’s total costs or asking key questions about their coverage, and ultimately that means they then experience unexpected issues. We work hard to inform consumers on the front-end to help ensure they get the right plan from the start.” Commissioner Navarro and Director Turner recently shared enrollment advice on Delmarva Life.

Ten Tips for a Successful Medicare Open Enrollment

1. Know that enrolling in a Medicare Advantage plan means it becomes your primary coverage. Original Medicare will no longer pay for services. You will receive a new ID card from the new plan, and should store your Original Medicare card in a safe place.
2. When moving from Original Medicare to a Medicare Advantage plan, be prepared to pay both a monthly Medicare Advantage premium and a monthly Medicare Part B premium.
3. Medicare Advantage plans do not automatically give you “more money in your Social Security check every month.” To qualify, you must be eligible for the Medicare Savings Program by having an income below Medicaid limits.
4. Check that additional benefits, like dental, vision, hearing, fitness, or over-the-counter medications are actually accessible if offered. Some network providers of these services may be farther away than anticipated, including in neighboring states, so only factor them into your decision if you feel they are usable.
5. Know that premium costs aren’t the only out-of-pocket costs you may face. Medicare Advantage plans may have co-pays or cost-sharing that differ from Original Medicare.
6. Call your preferred healthcare providers and facilities to understand if your prospective plan contracts with them. You may experience additional out-of-pocket expenses, service denial, or referral requirements if providers are considered out of network.
7. Check if a prospective plan is a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO). HMO plans require healthcare to be completed by a provider contracted with the plan’s network, otherwise the consumer will need a referral. PPO plans have both in-network and out of network providers and facilities, with consumer costs differing based on the network. HMO and PPO plans are not Medicare Supplement Plans, and may have out-of-pocket costs each visit.
8. Check if the plan provides Prescription Drug (Part D) coverage that meets your needs.
9. Be aware that in many cases, enrollment locks a person into a plan for the full upcoming calendar year.
10. Scrutinize any contact carefully during Medicare Open Enrollment to ensure it is from a known, credible source. Commercials, cold calls, and other contact may be scams or can provide deliberately misleading information about a plan.

About the Delaware Medicare Assistance Bureau

The Delaware Medicare Assistance Bureau provides free one-on-one health insurance counseling for people eligible for Medicare. Residents can call DMAB at 1 (800) 336-9500 or (302) 674-7364 to set up a free, confidential session or visit the DMAB website for important educational resources. Counselors can assist with Medicare, Medicare Advantage, Medigap (Medicare Supplement Insurance), long term care insurance, billing issues, prescription savings, and much more. DMAB has a Virtual Welcome to Medicare Seminar helpful for new and soon-to-be Medicare beneficiaries and those exploring enrollment changes.

Be aware of non-compliant alternative health plans

Following in-depth reviews by independent actuaries and the Office of Value-Based Health Care Delivery, rates for regulated 2023 health, dental, and small group insurance plans were announced today. While premiums are rising steeply across the country, the extension of consumer-friendly subsidies through the Inflation Reduction Act, coupled with Delaware’s strong 2022 enrollment and 2023 Health Insurance Marketplace expansion, will limit consumer impact locally.

“This year, Delaware consumers have more carriers and plans to choose from than ever before, so they can find an affordable plan that meets their needs. We remain optimistic that this increased competition will lead to lower rates and higher care quality over time,” said Insurance Commissioner Trinidad Navarro. “Delawareans are facing rising costs in nearly every area of life and making difficult sacrifices to afford necessities – but let me be clear, no matter the financial cost, we cannot afford to sacrifice our health. We will continue to work to ensure that coverage is affordable and accessible to all residents.”

Two new health insurers will be joining the Marketplace for 2023. Before tax credits and subsidies, base rates for 21-year-old non-tobacco users range from $315 to $505 across 9 Aetna CVS Health plan options, and from $283 to $402 with AmeriHealth Caritas across 4 plan options. Returning ACA issuer Highmark Blue Cross Blue Shield of Delaware will be increasing rates 5.5% on average, with base rates for 17 plan options ranging from $249 to $618 including a catastrophic plan option. In the last few years, Highmark’s average rates have decreased roughly 10% despite this needed increase.

Plans on the marketplace are spread among metal-level categories – bronze, silver, gold, platinum and catastrophic – and are based on how enrollees choose to split the costs of care with their insurance company.

As always, Commissioner Navarro urges residents to be informed consumers and shop for the best plan for both their needs and their budget. 30 plans are available to Delawareans for the 2023 plan year, and local navigators are available to assist in choosing the right plan. Open Enrollment takes place November 1 through January 15.

Factors Involved in Expansion, Rates

Nationally, insurers are requesting increases due to inflation, increasing costs of care, and rising drug prices. In Delaware, both state and federal legislation contributed to the long-awaited carrier expansion and final rates.

“It’s no coincidence that Delaware was able to expand the number of carrier options on the Health Insurance Marketplace in the same year that laws limiting hospital price growth to appropriate, inflation-conscious levels became enforceable,” said Commissioner Navarro. “The hospital price growth law, for the first time in our state’s history, gave insurers leverage to negotiate lower costs for consumers while still ensuring that hardworking healthcare providers receive their fair share. We’re grateful to have worked with legislators and the Primary Care Reform Collaborative to put cost containment guardrails in place to curtail rising consumer expenses, encourage carrier expansion, and ensure the effectiveness of every dollar spent.”

With little financial limitations around hospital prices, private insurance plans pay the price – on average 224% more than Medicare plans, according to RAND Corporation.

During the rate filing process, questions also remained about the expiration of American Rescue Plan Act subsidies, which the department lobbied Delaware’s congressional delegation to extend. These subsidies lowered consumer costs significantly and contributed to the state’s largest-ever ACA enrollment, a year-over-year increase of 26.8%. Had these benefits expired, healthy consumers who were influenced to acquire coverage through the enhanced discounts may have left the marketplace, shrinking the risk pool and unbalancing rates. On August 16, President Biden signed the Inflation Reduction Act into law, extending subsidies into 2025.

Aside from potential enrollment increases due to the carrier expansion, future participation growth may come from Medicaid unwinding and income eligibility reviews. National efforts are underway to ensure smooth, affordable transitions to Marketplace coverage for those eligible.

Other ACA and ACA-Compliant Rates

Delta Dental will reduce both ACA and non-marketplace rates by an average of 4%, and Dominion Dental will increase ACA premiums by 2.2%. Metropolitan Life Ins. Co.’s small group non-marketplace dental plan rates will remain at their current level.

Returning off-market small group plans from Highmark will increase an average 2.4%, Optimum Choice plans will rise by 2.7%, and United Healthcare small group rates will increase by 2.8%. Aetna Health’s small group plans will increase 7.6%, and Aetna Life rates will increase 5.1% after an initial increase request of 8.8% was reduced. Aetna Health’s 9 off-marketplace individual plan rates will remain at their current level.

About ACA Plans

All ACA-compliant health plans offer essential health benefits, including coverage of pre-existing conditions, prescriptions, emergency services and hospitalization, mental and behavioral health coverage, outpatient care and telehealth, lab services, and more.

Open enrollment for 2023 Health Insurance Marketplace plans begins November 1. Residents may qualify to enroll or change plans based on special circumstances, such as income qualification, loss of health coverage, becoming a parent, or other qualifying factors throughout the year. Find out if you qualify for special enrollment.

Commissioner Navarro announces Health Insurance Marketplace expansion

Be aware of non-compliant alternative health plans