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CMS cuts Affordable Care Act Navigator funding from $36 to $10 million

This year Navigator organizations will be judged on offering options to the ACA such as Association and short-term plans.

Susan Morse, Senior Editor

The Centers for Medicare and Medicaid Services has cut the amount of Navigator funding for the Affordable Care Act from $36 million this year to $10 million for 2019.

The grant money to Navigator organizations is to help consumers wade through ACA health insurance options, but CMS said the number of people who enrolled through the program didn't justify the millions of federal dollars spent.

This year, a minimum of $100,000 will be awarded in each of the 34 federally-facilitated exchange states to provide assistance to consumers, starting in the fall of 2018. Awards will go to eligible organizations such as chambers of commerce, small businesses, trade associations, and faith-based organizations.

CMS also announced a new requirement that Navigator funding be based on performance from previous years, and also that representatives give consumers information on options other than ACA qualified plans, such as association health plans, short-term, limited-duration insurance, and health reimbursement arrangements, or HRAs. 

The Trump Administration this year has allowed for association and short-term plans that bypass ACA mandates for essential benefit coverage.

CMS said it would give funding priority to applicants  that demonstrate innovative and cost-effective approaches in reaching enrollment goals.

Last year, Navigator representatives interviewed said they received cuts of up to 75 percent in federal funding. They helped consumers beyond open enrollment, they said, answering requests for those who said they never received an insurance card or who asked for information on finding a doctor or about drug coverage.

During ACA open enrollment for 2018, Navigators received $36 million in federal grants, but enrolled less than 1 percent of consumers. Navigators also enrolled less than 1 percent for plan year 2017, despite receiving $63 million in federal grants, CMS said.

During grant year 2016-2017, 17 Navigators enrolled fewer than 100 people at an average cost of $5,000 per enrollee. In addition, nearly 80 percent of Navigators failed to reach their enrollment goal, according to CMS.

In 2018, the Trump Administration worked to repeal and replace the ACA and CMS cut promotional funds and shortened the open enrollment period.

Despite this, CMS said last year was its most successful open enrollment to date, and the most cost effective.

The need for Navigators has diminished, CMS said, as agents and brokers are enrolling more consumers. In 2018, they enrolled an estimated 42 percent at a cost of $2.40 per enrollee. 

"It's time for the Navigator program to evolve, which is why we are announcing a new direction for the program today. This decision reflects CMS' commitment to put federal dollars for the federally-facilitated exchanges to their most cost effective use in order to better support consumers through the enrollment process," said CMS Administrator Seema Verma.

The 2019 Payment Notice removes the requirement that each exchange have at least two Navigator entities and that Navigator entities must maintain a physical presence in the exchange service area.

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