NEW CASTLE (Sept. 7, 2021) – The Biden Administration has awarded Delaware $10,831,203 through the Centers for Medicare & Medicaid Services (CMS) to improve access to affordable, comprehensive health insurance coverage through its section 1332 state-based reinsurance waiver. Delaware is one of 13 states to receive these funds, also known as “pass-through funding,” which are available to states with approved section 1332 waivers that also have lowered premiums in implementing their waiver plans.

“We are grateful to the Biden Administration for acknowledging the progress of our reinsurance program in making health insurance more affordable and more accessible on the individual market,” Governor John Carney said. “During the COVID-19 pandemic, it is even more important that Delawareans have access to affordable coverage.”

In June 2019, Governor John Carney signed enabling legislation to create a reinsurance plan in Delaware, and in August 2019, CMS authorized the program. Under Delaware’s reinsurance program, which began Jan. 1, 2020, a portion of high-cost health care claims that drive up insurance rates for everyone on the individual market are reimbursed through a fund. The fund uses a mix of federal funding and assessments collected by the Delaware Department of Insurance from health insurance carriers. The Delaware Health Care Commission administers the program.

Delaware’s reinsurance plan, which is authorized by the federal government through 2024, has lowered premiums on the Health Insurance Marketplace on average more than 19% in the first two years. In addition to reducing premiums on the marketplace, the reinsurance program benefits 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.

As a result of changes made in the American Rescue Plan Act of 2021 (ARP), residents in Delaware and the other 12 states implementing reinsurance waivers may have access to more affordable health insurance coverage. States will also have more pass-through funding to implement their waiver, and they may also have their own state funding—that otherwise might have been spent on 2021 reinsurance costs–available to pursue innovative state strategies to further improve affordability.

These funds, also known as “pass-through funding,” are determined on an annual basis by the Department of Health and Human Services and the Department of the Treasury.

The additional funds announced by CMS range from $2.5 million to $139 million per state – varying based on factors such as the size of the state’s reinsurance program. The funds are the result of expanded subsidies provided under the ARP, which will result in new individuals enrolled, and will cover a portion of the states’ costs for these reinsurance programs.

“This investment is a testament to our Administration-wide commitment to making health care more accessible and affordable,” said HHS Secretary Xavier Becerra. “This funding from the American Rescue Plan will reduce monthly health care costs for consumers, increase coverage, and provide more options. We will continue to work with states to strengthen the health care system as we respond to the COVID-19 pandemic.”

“Reducing a family or individual’s average monthly health coverage costs frees up that money for other needs,” said CMS Administrator Chiquita Brooks-LaSure. “The Biden-Harris Administration continues to work with states to reduce costs and deliver more affordable health coverage options. This is another example of how the American Rescue Plan is helping more people meet their health care needs.”

States with approved section 1332 state-based reinsurance waivers have experienced reduced premiums in the individual market. Delaware’s next open enrollment on the Health Insurance Marketplace will be Nov.1-Dec. 15 for coverage beginning in 2022.

Beyond reduced premiums, section 1332 state-based reinsurance waivers may help states maintain and increase issuer participation, and may increase the number of qualified health plans (QHPs) available from year to year.

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.