Delaware Unveils Health Insurance Purchasing Plan

Delaware officials unveiled their proposal for a statewide purchasing pool they believe could make health insurance more affordable for individuals and small businesses.

Though short on details, draft legislation unveiled by Insurance Commissioner Matt Denn calls for a public-private partnership in which private insurance firms would market the program, and the state would provide a reinsurance fund to protect insurers against catastrophic losses.

“Like every other state, Delaware has a lot of problems with health insurance,” Denn said during the first of what he hopes will be weekly meetings with representatives of the business, medical and insurance communities. “… This is a number one priority for us.”

While acknowledging that the draft legislation is subject to several changes, Denn said the proposal is based on three premises: offering reasonable coverage at an affordable price; offering coverage to all Delawareans, regardless of prior or pre-existing medical conditions; and minimizing the risk to the state by relying primarily on the private insurance market.

To be eligible for the program, a person would have to be a resident of Delaware for at least two years, or employed by a Delaware business.

Under the proposal, a state panel would design one or two benefit packages that would have “a relatively narrow window of premium prices” but no uniform costs.

The benefit packages would be put out to bid, allowing private insurers to quote premium prices. In an effort to keep premiums affordable, the state would make annual contributions to a reinsurance pool that would cover catastrophic losses over a set amount, which has yet to be established.

Insurers currently administering the state employee health benefits program would be required to submit “good faith” bids on the new program, Denn said.

Hospitals and other medical facilities would be required to contribute a percentage of their savings from treating fewer uninsured patients to the state reinsurance fund.

Denn admitted that the program could be a tough sell, but said he expects the General Assembly to approve the legislation this year.

“The alternative is not to deal with it, and that’s not acceptable,” he said.

Gov. Ruth Ann Minner already has voiced her support for the concept of a health insurance pool, said Denn, who hopes to begin offering enrollment in the new statewide pool by Nov. 1.

While there are an estimated 70,000 uninsured people in Delaware, officials said they don’t know how many Delawareans, uninsured, underinsured, or barely able to afford their current health insurance, might participate in the program.

“There are some actuarial issues that have to be addressed,” said Denn, who hopes to have some figures available for lawmakers by April.

Sen. Patricia Blevins, D-Elsmere, and Rep. Donna Stone, R-Dover, said they hope to introduce legislation after the General Assembly reconvenes next month, allowing time for the proposal to be considered by legislative budget writers.

“This bill, no matter how it ends up being drafted, if the dollars aren’t there in the budget, none of it happens,” Stonesaid.

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