2020 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

Exclusive! Delaware: 2018 MLR Rebate Payments (& potential 2019 rebates)

MLR rebate payments for 2018 are being sent out to enrollees even as I type this. The data for 2018 MLR rebates won't be officially posted for another month or so, but I've managed to acquire it early, and after a lot of number-crunching the data, I've recompiled it into an easy-to-read format.

But that's not all! In addition to the actual 2018 MLR rebates, I've gone one step further and have taken an early crack at trying to figure out what 2019 MLR rebates might end up looking like next year (for the Individual Market only). In order to do this, I had to make several very large assumptions:

  • First, I assumed total enrollment for each carrier remains exactly the same year over year.
  • Second, I assume the average 2019 rate changes I recorded for each carrier last fall are accurate.
  • Third, I assume 2019 is seeing a 5% medical trendline on average...that is, that total 2019 claims per enrollee will be 5% higher than 2018's.

All three of these are very questionable, of course, but they at least provide a baseline.

All that being said, here's what the payments for 2018 going out this months look like in Delaware:

  • Large Group Market rebates nearly tripled from $614,000 to $1.75 million
  • Small Group Market rebates increased from $5.9 million to $6.5 million
  • No Individual Market rebates for at least two years running.

NEXT year, however, could see huge Indy Market MLR rebates...potentially up to $10 million, which would be massive for a state as small as Delaware. Here's why: Highmark BCBS (the only carrier operating on Delaware's exchange) had a horrendous 100.6% MLR in 2016, which basically means they were losing money on the individual market even before adding operating expenses. In 2017 this dropped to 84%...but in 2018, it plummeted to just 71.6%, a massive overcorrection. This gave them an 84.5% 3-year average MLR, still way way over the 80% rebate threshold.

For 2019, however, after raising their rates 3%, Highmark could be looking at another low-70's MLR for the year...and with 2016 dropping off the average, that means they'll be weighting 84%, 71.6% and perhaps 73%, which could bring them in at around 75%. If so, that would mean they'd have to pay back a full 5% of their 2018 premiums to enrollees:

AGAIN: There's absolutely no guarantee that things will play out this way. It's possible that none of these carriers will make MLR payments next year, or only some of them will, or the amounts will be smaller. These 2019 projections are pure speculation on my part based on a number of big assumptions.