Senior Policy Analyst
The Centers for Medicare & Medicaid Services’ (CMS) decision to drastically cut funding for consumer outreach and assistance for enrolling in the Affordable Care Act’s (ACA) health insurance marketplaces comes as a shock to the hundreds of community- and state-based organizations that were counting on CMS finalizing its awards to these organizations today. But it will also mean that fewer people will take advantage of available coverage and financial assistance. Not only does that mean more people will go uninsured, it will also undermine efforts to strengthen the individual market risk pool and improve market stability.
CMS announced yesterday that it will spend only $10 million on outreach to consumers to inform them about available coverage and financial assistance — a 90 percent cut from last year. And navigator funding, which supports enrollment, will fall by about 40 percent, from $63 million last year to about $36 million this year.
CMS gave navigator groups verbal award estimates many weeks ago and many reassurances about the anticipated funding levels, but the agency nevertheless announced that it will use a new formula to determine award amounts. It will now award funds based on navigator groups’ actual enrollment of individuals in marketplace plans for 2016 compared to their enrollment goals.
That approach has numerous problems.
First, the new formula is a flawed measure of navigator effectiveness. For example, navigators perform many duties, but this formula considers their performance on just one aspect of their work. Under the ACA, each marketplace must have a navigator program that raises awareness about marketplace coverage, provides fair and impartial information about health plan options and subsidies that can make coverage more affordable, makes referrals for individuals to get appropriate assistance if they have a grievance related to their coverage, and facilitates enrollment. But some navigators may have had to spend a disproportionate amount of time on awareness building amid negative rhetoric about the ACA during last year’s open enrollment period and consequently fell short on securing enrollments. Moreover, the new formula holds navigators accountable for enrollment shortfalls that were likely partly attributable to confusion related to Republican promises to repeal the ACA, the Trump Administration’s decisions to end outreach during the final days of the last open enrollment period, and uncertainty about whether the Administration would enforce the ACA’s individual mandate.
Second, the new formula ignores consumer needs. For example, it doesn’t take into account the concentration of need in some geographic locations or how more investment is needed to reach certain communities, such as those in rural areas or those with limited English proficiency.
Third, there’s no justification to cut total navigator resources. CMS might choose to award more dollars to especially effective navigators and less to those that were less effective (taking into account all of their duties), but slashing overall navigator funding punishes consumers. Consequently, far fewer consumers will have access to impartial assisters when enrolling in marketplace plans this year.
Fourth, it’s especially damaging to announce major funding cuts just two months before the start of open enrollment. It’s unclear when CMS will communicate new funding amounts to these groups, which expected final grant awards today. Many of them have staff that were going to continue being paid with this new grant award, some have hired staff that are ready to start next week, and most have probably signed leases for office space and bought equipment for that staff to use. Many likely also planned outreach activities that they intended to start next week and have booked venues and bought materials to support that work.
The large consumer outreach cuts will have major negative effects. Going into last year’s open enrollment period, nearly half of uninsured adults were unaware of the financial assistance available to help pay for health insurance, even though nearly 85 percent of marketplace-eligible uninsured Americans had incomes that could qualify them for financial help. Reduced television, radio, digital, mail, phone, and email outreach means that fewer people will take advantage of the coverage and financial assistance available to them, and more people will go uninsured, leaving them unable to access the health care they need or exposed to unaffordable medical bills.
Reduced outreach will also undermine the broader individual market risk pool and market stability. As a bipartisan group of eight governors explained this week, “increasing coverage uptake among the uninsured would improve the risk pool and set in place a virtuous cycle of lower premiums leading to higher enrollment. . . . The federal government should continue to fund outreach and enrollment efforts that encourage Americans to sign up for insurance. Many states invest in similar efforts, and all states need the federal government's support to maximize participation from younger, healthier people.”
There’s growing bipartisan interest in legislation that would strengthen the ACA marketplaces, for example by guaranteeing cost-sharing reduction payments to insurers. Unfortunately, even if these efforts succeed, the Administration’s actions to undermine the upcoming open enrollment period and discourage consumers from signing up for coverage could undo that progress.