2018 Rate Hikes: Delaware (early look)

Calculating the average requested rate hike in Delaware is easier than most states. This year they officially have 5 carriers participating in the individual market (3 on exchange, 2 off)...but one of those is "Freedom Life" which is a phantom carrier; another is Golden Rule which only has about 120 enrollees; and two of the others are divisions of Aetna, which is dropping out of Delaware's indy market next year altogether. That leaves just Highmark BCBS, unless Golden Rule has surprised me by enrolling a significant number of people off-exchange this year.

Today the Delaware Dept. of Insurance issued this press release:

Highmark Requests 2018 Health Insurance Rate Increase of 33.6%

Date Posted: Wednesday, June 14th, 2017

Dover, DE – The Delaware Department of Insurance (“DOI”) has received a proposed rate increase request from Highmark Blue Cross Blue Shield of Delaware (“Highmark BCBSD”) for 33.6% for its 2018 individual Marketplace business. This requested rate increase assumes that the cost-sharing subsidies and individual mandate will not be in place for 2018. Highmark BCBSD’s proposed rate will be thoroughly vetted by the DOI and its independent actuaries before a final rate is determined.

In May, Aetna, Inc. (“Aetna”) announced its plans to withdraw from the Affordable Care Act’s (“ACA”) Insurance Marketplace effective January 1, 2018. This leaves Highmark BCBSD as the only health insurer to have filed products and rates for Delaware’s 2018 “Obamacare” market.

“Highmark’s proposed rate increase reflects the fact that the Federal Government could cut funding for the ACA by discontinuing cost-sharing reduction subsidies,” says Delaware Insurance Commissioner Trinidad Navarro. “Cost-sharing reduction subsidies are passed on to insurers to assist lower income individuals and families. In addition, it is unclear whether the ACA individual mandate will be enforced next year. If the Federal Government fails to live up to its obligations under the law, insurers will likely continue to exit the Marketplace.”

Approximately 27,000 Delawareans have health insurance through the Marketplace and will be affected by increasing rates and/or insurer withdrawals. It is important to note that the proposed rate increase will not apply to Delawareans on Medicaid or those with group or individual policies outside of the Marketplace.

“Without competition from other companies and with the Affordable Care Act’s fate left up to members of the federal government who appear to oppose it, we are in a difficult position. My job is to pursue premium fairness and increased competition. I will continue to work with Senators Carper and Coons and Congresswoman Blunt-Rochester’s offices to fight for the best interests of the people of Delaware,” added Commissioner Navarro.

Unfortunately, the press release doesn't break out just how much of that 33.6% is due to the CSR/mandate enforcement factor. The Kaiser Family Foundation estimates CSRs are responsible for around 11 points of Delaware's increase, and 62% of DE exchange enrollees chose Silver plans, so that should be roughly 6.9% of the total:

• CSRs Paid: ~26.7%
• CSRs Not Paid: ~33.6%