Last week, the Trump administration nearly eliminated federal funding for a program whose purpose is to help people get health insurance coverage. The Centers for Medicare and Medicaid Services (CMS) announced that it was slashing funds for the Affordable Care Act’s (ACA) navigator program to $10 million, down from the pre-Trump level of $63 million. The $10 million will be spread across nonprofit organizations in 34 states that inform people about their insurance options and help them navigate the plan selection and enrollment process. This is bad news for consumers.
The American Health Care System Is Not Consumer Friendly
Despite the rhetoric we often hear from policymakers about choice in American health care being a boon to consumers, the process of choosing a health plan is far from consumer friendly. Few rigorous metrics of doctor or hospital quality exist for consumers in search of a provider network that offers the best care, and real information amount the price of services is not readily available, even as consumer cost-exposure in health insurance plans grows. And when it comes to choosing or using a health plan, terms that describe a plan’s characteristics, like deductible exclusions, can be hard to comprehend.
The majority of Americans are covered by employer health plans, so companies and human resource departments select their plans and may help them make the best choice. But in the individual market, consumers are on their own. Fortunately, the ACA transformed the individual market, making it markedly easier to be offered, as well as to select and afford, a health plan. The law banned insurers from pricing or denying people health insurance on the basis of health, provided subsidies, required plans to cover services that are the norm in employer plans, and labeled plans based on how much cost-sharing is required.
In 2010, before the ACA individual market reforms of 2014, the Commonwealth Fund Biennial Health Insurance Survey found that among working-age adults who had coverage in the individual market or had tried to buy a plan over the prior three years, more than one-third reported being turned down, charged a higher price, or that an insurer refused to cover services for a preexisting health condition. Six of 10 said they found it very difficult or impossible to find a plan they could afford, and four of 10 said the same about finding a plan that met their needs. By 2016, when we asked a similar series of questions on the same survey, there was significant improvement in these areas, but problems were by no means fully resolved.
Consumers Still Need Assistance Shopping for Health Plans
Our surveys show that, over the past four years, awareness of the ACA marketplaces has grown among the American public and consumers are somewhat better able to compare health plans on dimensions of benefits covered, premiums and potential out-of-pocket costs, and network providers. But challenges remain. We find significant percentages of uninsured people who remain unaware of the marketplaces and uncertain if they can afford plans despite having incomes that would make them eligible for generous subsidies. People also report ongoing difficulty comparing plans on key dimensions, especially in the area of network providers. However, we also consistently find that getting personal assistance, whether through a broker, navigator, or telephone hotline makes a significant difference in whether someone enrolls in a plan.
While insurance brokers have played an important role in helping consumers sort through their options, the ACA’s navigator program has been critical in regions of the country where brokers may not be available, for lower-income and/or non-English-speaking consumers, and for people who either may not know where to look for a broker or may not be familiar with their role in insurance markets. Many navigator programs are run by organizations that have years of experience helping lower-income and similarly disadvantaged Americans. Karen Pollitz and colleagues at the Kaiser Family Foundation found that navigators were more likely than insurance brokers to have clients who were uninsured, low-income, Latino, or who had no internet access.
The Trump administration’s near-elimination of the navigator program falls on the heels of similar federal changes to the marketplaces that have raised information barriers and increased the cost of plans. These changes include the near-elimination of the federal marketplace advertising budget last year, the removal of the so-called Simple Choice plans introduced by the Obama administration that simplify plan choices, the repeal of the individual mandate, and the loosening of restrictions on health plans that don’t comply with the ACA market rules.
Directing Consumers to Non-ACA-Compliant Health Plans
Even more perplexing than the slashing of the navigator program is CMS’s directive to navigators to inform consumers about the existence of non-ACA-compliant policies. Short-term, limited-duration health plans, association health plans, and other limited-benefit plans are low-priced because they cover fewer services and their premiums can be set based on health, gender, and other characteristics. These plans will not only leave people more exposed to health care costs, they will damage the individual market in states that choose not to restrict them by leaving a sicker group of people in the ACA-compliant individual market. The Congressional Budget Office estimates that these plans will increase premiums by 2 to 3 percentage points, but greater take-up could lead to bigger increases.
Federal Savings Offset by Higher Tax Credits
The new CMS navigator policy and budget reduction may increase the number of uninsured Americans, leave a less healthy pool of people in the ACA-compliant individual market, and increase premiums. By extension, it also may increase the federal government’s spending on tax credits for people who buy health plans in the ACA marketplace, as these credits rise with premiums. The savings the administration exacts from cutting the program could, in fact, be partially or fully offset by these higher costs. And consumers will be more in the dark than ever on their health care options.
The author thanks Munira Z. Gunja and Herman Bhupal for research assistance.
