Wednesday, Nov. 1 will mark the beginning of the next open enrollment period in the Obamacare exchanges.
This will be the first enrollment season since the Trump administration changed the enrollment process and scaled back the “navigator” program.
The navigator program is a federal initiative designed to guide Obamacare enrollees as they jump through the system’s bureaucratic hoops, steering them to the health insurance program that best suits their needs.
Advocates of the navigator program were dismayed at President Donald Trump’s decision to cut funding for the program, claiming the cuts will “sabotage” Obamacare and block people from enrolling.
This narrative is simply false.
When Obamacare first launched, the navigators had a large customer base as millions of people were trying to figure out whether they qualified for the expanded Medicaid program or the new federal subsidies for insurance plans offered through the exchanges.
The vast majority of new customers were steered into Medicaid. But the stampede was short-lived.
Medicaid enrollment in the 24 states and District of Columbia states grew by 23.6 percent in 2014, but then by only 3.5 percent in 2015 and 1.1 percent in 2016.
That overall trend played out quite similarly at the individual state level. In Maryland, for instance, Medicaid rolls expanded by more than a third in 2014, but in the very next year, they only expanded by 2 percent.
The pattern was similar on the new health insurance exchanges. In 2014, over 5 million people received subsidized exchange coverage. That figure grew to 7.4 million in 2015, but the following year it only grew to 7.6 million.
Moreover, many people who enrolled on the exchanges did so without the help of navigators. Instead, they chose to use licensed insurance agents or simply enrolled on their own, either online or in-person.
In California, for example—a state viewed as a model for running the exchanges—the government aggressively implemented Obamacare in 2014. But in the first year, California’s navigators enrolled only 9 percent of exchange enrollees. Over 40 percent of enrollees signed up without help, and 40 percent received help from licensed agents.
The following year, only 7 percent of enrollees used navigators, 36 percent enrolled by themselves, and 47 percent were enrolled by a licensed agent.
Not only is foot traffic for the navigators down, more and more of it is moving away from the insurance exchanges. Soaring coverage costs are driving individuals out of the market. Today, there are half a million fewer Americans in the exchanges than last year.
And not only do navigators have fewer customers to serve, they have fewer products to sell. Like the customers they had hoped to serve, insurers are pulling out of the exchanges, too.
As a result, many Americans not already insured through work or enrolled in government health programs find themselves in Obamacare exchanges that offer only one or two options for coverage. With choices that limited, most people don’t need a navigator’s help to pick one.
While the navigators’ customer base has declined dramatically—resulting in less need for their services—they still retained a hefty budget.
The navigators received their funding from a 3.5 percent user fee paid by those participating in the exchanges. Those fees amounted to $62.5 million in funding last year, up $2.5 million from the previous year.
In light of these facts, the president decided to cut navigator funding by 40 percent and infuse more accountability into the program.
Moving forward, funding will be based on performance and will reflect how well navigators assist the uninsured in finding health coverage. For example, if the navigators reach only 45 percent of their enrollment goals, their funding for the following year will be set at 45 percent of the previous year’s allotment.
The 40 percent cuts will force many navigator programs to lay off staff and reduce outreach services. And that’s as it should be.
The data clearly show the Obamacare exchanges have maxed out on all the coverage gains they can produce.
Congress should now concentrate on reforming Obamacare in ways that will provide relief—and options—for those who have to rely on the exchanges for coverage.
One way of doing so would be to cut the 3.5 percent user fee. If navigators aren’t being used to enroll, why should enrollees be charged a fee for their services?
Right-sizing spending on the navigator program is a good thing. Like most federal programs, it can use a healthy dose of accountability, one that ties funding to performance.
