(a) Rates must be made in accordance with the following provisions:
(1) Manual, minimum, class rates, rating schedules or rating plans shall be made and adopted, except in the case of specific inland marine rates on risks specially rated;
(2) Rates shall not be excessive, inadequate or unfairly discriminatory;
(3) Due consideration shall be given:
a. To past and prospective loss experience within and outside this State;
b. To the conflagration and catastrophe hazards;
c. To a reasonable margin for underwriting profit and contingencies;
d. To dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers;
e. To past and prospective expenses both countrywide and those specially applicable to this State;
f. To all other relevant factors within and outside this State; and
g. In the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent 5-year period for which such experience is available;
(4) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable;
(5) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions or both. Such standards may measure any differences among risks which may have a probable effect upon losses or expenses;
(6) The Commissioner shall require a reduction in rates for a 3-year period for any person who voluntarily attends and successfully completes a motor vehicle accident prevention course that is approved by the Division of Motor Vehicles.
a. A motor vehicle accident prevention course under this paragraph (a)(6) must educate an individual taking the course on traffic stops by a law-enforcement officer as required under § 2713(e) of Title 21. A motor vehicle accident prevention course under this paragraph (a)(6) must include at least 2 questions on any test given to an individual taking the course to test the individual’s knowledge of traffic stops by a law-enforcement officer.
b. Motor vehicle accident prevention course instructors that have been certified by the Division of Motor Vehicles are entitled to the same reduction in rates as those individuals that have successfully completed a motor vehicle accident prevention course, in the manner set forth in regulations promulgated under this section.
c. The reduction must be for any individually owned vehicle classified as a private passenger vehicle and must be in proportion to the number who have completed the course in the event that not all members of a group have completed the course.
d. Voluntary attendance does not include any attendance ordered as permitted by a court or required by the Division of Motor Vehicles pursuant to any violations of Title 21;
(7) The Commissioner shall require a reduction in rates for a 3-year period for any person who voluntarily attends and successfully completes a motorcycle rider course that is approved by the Division of Motor Vehicles.
a. A motorcycle rider course under this paragraph (a)(7) must educate an individual taking the course on traffic stops by a law-enforcement officer as required under § 2713(e) of Title 21. A motorcycle rider course under this paragraph (a)(7) must include at least 2 questions on any test given to an individual taking the course to test the individual’s knowledge of traffic stops by a law-enforcement officer.
b. Motorcycle rider course instructors that have been certified by the Division of Motor Vehicles must be entitled to the same reduction in rates as those individuals that have successfully completed a motorcycle rider course, in the manner set forth in regulations promulgated under this section.
c. The reduction must be for any individually owned vehicle classified as a motorcycle and licensed for use on the streets and highways of this State.
d. Voluntary attendance does not include any attendance ordered as permitted by a court or required by the Division of Motor Vehicles pursuant to any violations of Title 21;
(8) The Commissioner shall require insurers to file an actuarially justified reduction in rates for a 3-year period if all operators of a vessel voluntarily attend and successfully complete a boating safety education course which is approved by the Department of Natural Resources and Environmental Control for the purposes of § 2221 of Title 23. The reduction shall be for any individually owned vessel used exclusively for noncommercial purposes. Voluntary attendance shall not include any attendance ordered as permitted by a court or required by the Department of Natural Resources and Environmental Control pursuant to any violations of Title 23;
(9) Rate filings concerning automobile collision insurance shall provide for a credit of 5 percent of annual premiums for such coverage for any individually owned vehicle classified as a private passenger vehicle owned by employees participating in an approved Travelink Traffic Mitigation Act program created pursuant to subchapter IV of Chapter 20 of Title 30;
(10) An insurer authorized to do business in Delaware cannot increase a renewal rate for a personal automobile insurance policy based solely on an insured having attained the age of 75 or older;
(11) With respect to personal automobile insurance for an existing insured, an insurer authorized to do business in Delaware may not charge the insured a higher rate solely based upon a change in the insured’s marital status due to the death of a spouse.
(12) a. Rate filings for health benefit plans may not include aggregate unit price growth for nonprofessional services that exceed the following:
1. In 2022, the greater of 3% or Core CPI plus 1%.
2. In 2023, the greater of 2.5% or Core CPI plus 1%.
3. For rate filings filed in 2024, 2025, 2026, and 2027, the greater of 2% or Core CPI plus 1%.
b. For purposes of this paragraph (a)(12) and paragraphs (a)(13) through (a)(15) of this section:
1. “Core CPI” means the average of the 12 preceding bimonthly indices calculating the over-the-year changes of the Consumer Price Index for All Urban Consumers in the Philadelphia-Camden-Wilmington Area, all items less food and energy, developed by the United States Bureau of Labor Statistics.
2. “Health benefit plan” means as defined under §§ 3342A(a)(3)a. and 3559(a)(3)a. of this title.
3. “Inpatient hospital” means noncapitated facility services for medical, surgical, maternity, skilled nursing, and other services provided in an inpatient facility setting and billed by the facility.
4. “Nonprofessional services” means services categorized as inpatient hospital, outpatient hospital, and other medical services. “Nonprofessional services” does not include professional services.
5. “Other medical services” means noncapitated ambulance, home health care, durable medical equipment, prosthetics, supplies, and the facility component of vision exams, dental services, and other services when billed separately from the professional component.
6. “Outpatient hospital” means noncapitated facility services for surgery, emergency services, lab, radiology, therapy, observation, and other services provided in an outpatient facility setting and billed by the facility.
7. “Professional services” includes primary care, dental, specialist, therapy, the professional component of laboratory and radiology, and similar services, other than the facility fee component of hospital-based services.
c. The Commissioner shall annually determine the Core CPI by March 31 of the applicable rate filing year using the bimonthly indices ending with the bimonthly index issued in January of the applicable rate filing year through 2027.
d. The Commissioner shall annually communicate, under § 312(c) of this title, the determination under paragraph (a)(12)c. of this section to carriers.
e. Paragraph (a)(12)a.3 of this section does not apply in any of the following circumstances:
1. When a hospital meets the definition of a “free-standing children’s hospital” under this section.
2. When a hospital meets the definition of a “Medicare-dependent rural hospital” pursuant to paragraph (a)(15)g.1. of this section.
3. When a hospital meets the definition of an “urban Medicaid DSH hospital” under this section.
(13) All rate filings for health benefit plans subject to §§ 3342B and 3556A of this title must reflect the spending requirements under §§ 3342B(b)(3) and 3556A(b)(3) of this title.
(14) All rate filings by carriers who have issued health benefit plans in the Delaware commercial market for the last 2 years and whose plans cover more than 5,000 members across all fully-insured products must have either 50% or the highest achievable percentage based on actuarial credibility requirements of total cost of care tied to an alternative payment model contract that meets the Health Care Payment Learning and Action Network (HCP-LAN) Category 3 or Category 4 with a minimum of 15% or the highest achievable percentage based on actuarial credibility requirements of total cost of care covered by an alternative payment model contract that meets the definition of HCP-LAN Category 3B or Category 4.
(15) For rate filings filed in and after 2028, as set forth in paragraphs (a)(15)m. and (a)(15)n.of this section, costs per inpatient hospital service, outpatient service, and emergency department service for health benefit plans may not exceed the applicable Medicare reference-based pricing target set forth in paragraph (a)(15)m. of this section, as of the date of service, for comparable services for the applicable plan year, and free-standing children's hospital outpatient Medicare rates may not exceed the applicable medicare reference-based pricing target set forth in paragraph (a)(15)n. of this section, as of the date of service.
a. “Emergency department service” means services generally performed in an emergency department, including trauma services, triage, and observation.
b. “Free-standing children's hospital” means a dedicated, independent pediatric facility, not integrated within a general adult hospital, identified by the Center for Medicaid and CHIP Services (CMCS) as a hospital that provides specialized care for infants, children, teens, and individuals predominately under 18 years of age.
c. “Free-standing children's hospital Medicare outpatient payment rate” means, for purposes of free-standing children's hospitals, payments for free-standing children's hospitals that include all payments made under the Medicare Outpatient Prospective Payment System (OPPS), as established August 1, 2000, and codified at 42 C.F.R. Part 419.
d. “Full Medicare rate” means the applicable wage-adjusted Medicare rate, inclusive of any applicable adjustments, as updated by the Centers for Medicare and Medicaid Services (CMS) on an annual basis.
e. “Inpatient hospital service” means services generally performed in an inpatient acute hospital care setting, including general inpatient hospital services covered under Medicare Part A, labor and delivery, and intensive care.
f. “Medicare” means the federal Medicare Program (U.S. Public Law 89-87, as amended; 42 U.S.C. § 1395 et seq.).
g. “Medicare-dependent rural hospital” means a hospital that meets at least 1 of the following requirements for the applicable rate filing year:
1. The hospital meets the definition of a Medicare-dependent hospital as defined under 42 C.F.R. § 412.108 for at least 3 of the 5 years immediately preceding the applicable rate filing year.
2. The hospital operates solely within a county that is classified by the federal Health Resources and Services Administration (HRSA) as a rural health area, a medically underserved area, and a health professional shortage area for primary care, and the hospital’s gross patient revenue attributed to Medicare patients accounts for more than 60% of its total gross patient revenue.
h. “Medicare reference-based pricing (RBP) target” means a percentage of the full Medicare rate as set forth in paragraph (a)(15)d. of this section. With respect to free-standing children's hospitals, “Medicare reference-based pricing (RBP) targets” has the meaning as defined in paragraph (n) of this section.
i. “Outpatient service” means nonprofessional services not otherwise captured in the definition of inpatient hospital service or emergency department service.
j. “TEFRA rate” means the target amount under the federal Tax Equity and Fiscal Responsibility Act (TEFRA) Waiver Program applicable to free-standing children's hospitals set forth in 42 U.S.C. § 1395ww(b), including any updates and adjustments thereto.
k. “Urban Medicaid DSH hospital” means a hospital that met the criteria described in § 1923(b) of the federal Social Security Act (42 U.S.C. § 1396r-4(b)) and received Medicaid Disproportionate Share Hospital Program (DSH) payments from this State between July 1, 2021, and July 1, 2026.
l. If a comparable Medicare reimbursement rate is not available to determine the full Medicare rate for inpatient hospital services, outpatient services, or emergency department services, a carrier’s rate filings shall propose reimbursement for services at the rates generally available under Medicare for similar services, which shall be further delineated by regulation, unless otherwise specified in this section.
m. Applicable reference-based pricing targets for inpatient hospital services, outpatient services, and emergency department services. Unless otherwise specified in this section, rate filings for services provided by non-free-standing children's hospitals shall reflect Medicare reference-based pricing targets as follows:
1. For the 2028 and 2029 rate filings applying to plan years 2029 and 2030, all of the following apply:
A. 275% of the full Medicare rate for outpatient services.
B. 310% of the full Medicare rate for inpatient hospital services and emergency department services.
2. For the 2030 and 2031 rate filings applying to plan years 2031 and 2032, all of the following apply:
A. 250% of the full Medicare rate for outpatient services.
B. 275% of the full Medicare rate for inpatient hospital services and emergency department services.
3. For all rate filings occurring on and after 2032 for the following plan year, beginning with plan year 2033, 250% of the full Medicare rate for inpatient hospital services, outpatient services, and emergency department services.
n. Applicable Medicare reference-based pricing targets for free-standing children's hospitals. Unless otherwise specified in this section, rate filings for services provided by free-standing children's hospitals shall reflect Medicare reference-based pricing targets as follows:
1. For the 2028 and 2029 rate filings applying to plan years 2029 and 2030, all of the following apply:
A. 275% of the free-standing children's hospital Medicare outpatient payment rate for outpatient services.
B. 310% of the TEFRA rate for inpatient hospital services.
C. 310% of the free-standing children's hospital Medicare outpatient payment rate for emergency department services.
2. For the 2030 and 2031 rate filings applying to plan years 2031 and 2032, all of the following apply:
A. 250% of the free-standing children's hospital Medicare outpatient payment rate for outpatient services.
B. 275% of the TEFRA rate for inpatient hospital services.
C. 275% of the free-standing children's hospital Medicare outpatient payment rate for emergency department services.
3. For all rate filings occurring on and after 2032 for the following plan year, beginning with plan year 2033, all of the following apply:
A. 250% of the free-standing children's hospital Medicare outpatient payment rate for outpatient services.
B. 250% of the TEFRA rate for inpatient hospital services.
C. 250% of the free-standing children's hospital Medicare outpatient payment rate for emergency department services.
o. Reference-based pricing target exemptions and modifications. —
Paragraphs (a)(15)a. through (a)(15)n. of this section do not apply in any of the following circumstances:
1. When a hospital meets the definition of a “Medicare-dependent rural hospital” pursuant to paragraph (a)(15)g.1. of this section.
2. When a hospital meets the definition of a “Medicare-dependent rural hospital” pursuant to paragraph (a)(15)g.2. of this section and the Office of Value-Based Health Care Delivery has determined that the hospital has made demonstrative progress in adopting and implementing value-based payment models.
3. When a hospital meets the definition of an “urban Medicaid DSH hospital” under this section.
4. When the carrier and the hospital or applicable contracting provider entity are participants in a federal or state multi-payer global budget model approved by the Department. The Department shall provide notice annually of global budget models that are approved pursuant to this paragraph (a)(15)o.4.
(b) Nothing in this section shall be taken to prohibit as unreasonable or unfairly discriminatory the establishment of classifications or modifications of classifications or risks based upon size, expense, management, individual experience, purpose of insurance location or dispersion of hazard or any other reasonable considerations provided such classifications and modifications apply to all risks under the same or substantially similar circumstances or conditions.
(c) Except to the extent necessary to meet the provisions of paragraphs (a)(2) and (9) of this section, uniformity among insurers in any matters within the scope of this section is neither required nor prohibited.
