Highmark plan participants and groups to receive checks

Insurance Commissioner Trinidad Navarro announced today that Highmark Blue Cross Blue Shield Delaware will issue rebates totaling over $12.3 million to some Delawareans. Residents who purchase insurance on the Delaware Health Insurance Marketplace, those who purchase Highmark Delaware plans outside of the marketplace, and Highmark small group policyholders may receive rebates as a result of the Medical Loss Ratio (MLR) calculation.

MLR measures an insurer’s spending on medical expenses to confirm that at least 80 percent of premiums are being used for policyholders’ healthcare and prescription needs. It is an accountability measure included in the Affordable Care Act (ACA) that holds insurers to a strict standard and requires refunds if the threshold is not met. Insurers are not permitted to retain funds above this value for any reason, including to lower premiums for future years, as the policyholders effected may change. MLR is calculated on a three-year average – 2018, 2019, and 2020 were used in this assessment.

“Requiring insurers to meet the MLR ratio is one of the most critical tools the ACA gave us to protect consumers. These guardrails ensure residents and small businesses get the care they pay for, or get their money back – and they’re more important now than ever before,” explained Commissioner Navarro, who pointed to policyholders’ decreased and delayed use of healthcare throughout the pandemic as something likely to necessitate future rebates. “With decreased utilization of health services in 2020 and 2021 factoring into MLR for the next four years, and expected increases of utilization factoring into rates for 2022, this is yet another reminder that COVID will impact all aspects of healthcare, including insurance, for much of the foreseeable future.”

20,857 individual policyholders will receive rebates totaling over $8.4 million, with the average rebate being $405. This will be the second time in state history that rebates will be distributed to the participants of the individual market, with more than $12.6 million being sent to over 19,000 residents last year.

Highmark small groups, often small businesses, will receive nearly $3.9 million in cumulative return. 2,573 groups will receive an average rebate of $1,514, with 20 groups receiving rebates over $10,000. Employers can consider using these dollars to enhance benefits, reduce premiums for employees in future policy years, or provide refunds directly to group health plan participants.

Communications will be sent to policyholders in September and checks for both individual policyholders and small groups will be sent the week of September 15. Not every policyholder will receive a rebate. Those in the individual market with rebate questions can contact Highmark at 800-544-6679. Small group employers with rebate questions can contact their insurance producer, or Highmark at 800-241-5704.

On June 20, Gov. John Carney signed enabling legislation (House Bill 193) moving Delaware a step closer to a reinsurance program beginning in 2020.

NEW CASTLE (Aug. 20, 2019) – The Department of Health and Social Services (DHSS) received approval today from the Centers for Medicare and Medicaid Services (CMS) for a 1332 State Innovation Waiver under the Affordable Care Act to create a reinsurance program beginning in 2020 as a way to reduce premiums by up to 20 percent in Delaware’s individual health insurance market.

Under Delaware’s reinsurance program, a portion of high-cost health care claims that drive up insurance rates for everyone on the individual market will be reimbursed through an estimated $27 million fund. The fund will use a mix of federal funding and assessments collected by the Delaware Department of Insurance from health insurance carriers. The Delaware Health Care Commission will administer the program.

Coupled with reduced rates already sought on the individual market in Delaware, the state expects a significant reduction in premiums for 2020. CMS authorized Delaware’s reinsurance program through 2024.

“We are grateful to CMS for approving Delaware’s 1332 State Innovation Waiver application that will enable us to establish a reinsurance program in our state,” said DHSS Secretary Dr. Kara Odom Walker, a practicing family physician. “We expect that the reinsurance program will further stabilize the individual health insurance market and make premiums more affordable for Delawareans who need such coverage.”

“The number one complaint/comment we receive from consumers at the Department of Insurance is the high cost of health insurance, especially from those who are not eligible for tax credits,” Insurance Commissioner Trinidad Navarro said. “With this new waiver program, people who earn above 400 percent of the federal poverty level, small business owners, and those who are not covered by their employers will save up to 20 percent on their health insurance premiums in the individual market. My office will continue to work to seek any and all means to help make health insurance more affordable for Delawareans.”

The CMS approval was the final step in a months-long process that included a recommendation from a working group that included DHSS, the Department of Insurance, legislators and other stakeholders, enabling legislation approved by Delaware’s General Assembly in June and signed into law by Gov. John Carney, and public comment periods at the state and federal levels.

Delaware is the 11th state to receive CMS approval for a reinsurance program. A March 2019 analysis by health care consultant Avalere found state-run reinsurance programs reduce premiums by almost 20 percent on average in their first year.

In addition to reducing premiums on the marketplace, the reinsurance program will benefit anyone who buys coverage on the individual market, including people who are not eligible for coverage at their workplace, those who are too young for Medicare or make too much money to be eligible for Medicaid, young people who have aged off their parents’ plans, or those who are self-employed.

In 2019, about 21,000 people enrolled for coverage on Delaware’s Health Insurance Marketplace. Open enrollment for 2020 will begin Nov. 1 and run through Dec. 15. To learn more about the marketplace, go to ChooseHealthDE.com.

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The Department of Health and Social Services is committed to improving the quality of life of Delaware’s citizens by promoting health and well-being, fostering self-sufficiency, and protecting vulnerable populations.