On August 31st, the Centers for Medicare and Medicaid Services (CMS) announced that it would cut funding to navigator groups—organizations that help people enroll in health insurance through the federal Affordable Care Act marketplace—by approximately 40 percent. The move wasn't entirely unexpected: The Department of Health and Human Services, which houses CMS, had argued in the past that the navigator program was "ineffective" and claimed that funding decisions going forward would be based on individual group's performance with respect to their enrollment goals.
A new report from the non-partisan Kaiser Family Foundation, out today, digs into how navigator groups plan to respond to the funding cuts, and calls into question the Trump administration's official rationale for the cuts.
Overall, as the chart below (from the report) indicates, 82 percent of navigator groups were subject to funding cuts:
What's far from clear, however, is just how CMS made its funding decisions. Contrary to the administration's assertions, they don't seem to have much to do with navigator performance. The CMS bulletin announcing the changes specified that "a grantee that achieved 100 percent of its enrollment goal for plan year 2017 will receive the same level of funding as last year, while a grantee that enrolled only 70 percent of its enrollment goal would receive 70 percent of its previous year funding level, a reduction of 30 percent." But there are a lot of issues with that formula.
For starters, it's not remotely clear what enrollment metric CMS is referring to—navigators help consumers in a number of different ways and track their performance across several different metrics. And the most straightforward metric—the number of consumers that a given navigator group assisted with selecting and enrolling in a qualified health plan (QHP)—ignores a great deal of the outreach, education, and assistance work that navigator groups perform. Under that metric, a navigator who helped a consumer apply for Medicaid, for example, wouldn't get credit for enrolling that consumer in health insurance. Likewise, navigators only get credit for plan selections made in their presence—so if a navigator helped a consumer in their office, but the consumer made their final decision on a plan at home later that night, that consumer would not count toward the navigator's enrollment goals. Then there's the fact that, under the Obama administration, navigators were encouraged to set ambitious enrollment goals, and will now be penalized for not meeting those goals under this new formula.
But even setting those concerns with the formula aside, the Kaiser report indicates that CMS doesn't seem to have followed that formula. The chart below compares navigator group funding to their performance on the QHP selection metric:
Only 22.5 percent of navigator groups received funding in line with the CMS formula. An additional 22.5 percent of groups, meanwhile, actually met their QHP selection enrollment goals and still had their funding reduced.
Nor do these cuts seem to be at all concerned with geographic equity, as they vary widely from state to state. Delaware, Kansas, and West Virginia, for example, will see no cuts to total state navigator funding this year. Meanwhile states like Indiana, Louisiana, and Nebraska will see draconian cuts to total navigator funding—of 82 percent, 80 percent, and 81 percent, respectively. This represents a dramatic shift from navigator funding formulas during the Obama era, as the Kaiser researchers point out:
When the multi-year agreement was established, federal funding was allocated across FFM states based on the state's share of the number of uninsured people, with a minimum amount ($600,000) reserved for each of the smallest states. This allocation formula no longer seems to apply. For example, total funding for Navigators in Indiana ($290,000) was less than that for Navigators in Alaska ($447,000) despite the fact that there are four times as many uninsured residents in Indiana compared to Alaska (422,000 vs 95,600 in 2016). Similarly, funding for Navigators in Ohio was less than that for Navigators in Oklahoma ($568,000 vs $798,000) though there are more uninsured residents in Ohio (631,000 vs 409,000).
In response to these cuts, most navigators say they'll continue to operate but will have little choice to dramatically curtail their operations. The chart below illustrates how navigator groups say they'll respond to the funding cuts:
What's more, it may be the rural voters, the very people who helped propel President Donald Trump to victory, who are most hurt by these cuts. Fifty-five percent of statewide navigator programs, and 72 percent of regional navigator programs, say they'll likely have to reduce the services they provide to rural communities as a result of the funding cuts.