HealthCare.gov managers might push the people and organizations in the nonprofit Navigator program to tell hard-to-insure consumers about short-term health insurance, association health plan coverage, and other products agents might like to sell themselves.
Navigators could help consumers go online to buy gap-filler products. But HealthCare.gov managers seem to be sketching out a framework that would make Navigators a source of referral business for insurers, and for agents and brokers, rather than gap-filler product enrollers.
Officials at the Centers for Medicare and Medicaid Services (CMS), the arm of the U.S. Department of Health and Human Services (HHS) that runs HealthCare.gov, talk about possible changes in Navigators’ role in a new Navigator program grant application package.
CMS announced Tuesday that it plans to award $10 million in Navigator program grants for the open enrollment period for 2019, which is now set to start Nov. 1 and end Dec. 15. CMS is cutting Navigator grant funding from $36 million for the 2018 open enrollment period, and from $63 million for the 2017 open enrollment period.
A copy of the grant application package is available here.
Here’s a look at three things agents and brokers might want to know about the 2019 Navigator program.
1. ACA English
Democrats in Congress developed the ACA public exchange system, and exchange plan subsidy system, to serve as an alternative to setting up a government-run single-payer health care for the United States.
The ACA exchange system is supposed to be a web-based shopping mall for commercial health insurance policies.
Some states run their own ACA exchange programs.
HHS and CMS set up HealthCare.gov to handle exchange enrollment and account administration services for states that are unwilling or unable to handle those tasks themselves.
The ACA drafters came to realize that the system would be hard for many consumers to understand. They then developed a system of Navigators, or ombudsmen, to give consumers advice about how to use the system.
The ACA itself provided funding for the Navigator program for only four years, in part because of a belief that, after four years, most consumers would know how to use the public exchange system without help from live humans.
Under the administration of former President Barack Obama, CMS developed rules that emphasized that the Navigators were simply supposed to help consumers understand the ACA public exchange system, without actually recommending specific plans, and without collecting commissions or other compensation from the exchange plan issuers.
Each state had to have at least two exchange Navigator entities, and at least one of the Navigators had to be a nonprofit entity based in the state.
Many of the Navigator entities were public health organizations and patient and consumer advocacy groups. CMS allowed agents to act as Navigators but imposed many restrictions that tended to shut out agents.
Over the years, Navigators have competed against agents and brokers in some cases in some markets and cooperated with licensed producers in others.
Up until this month, HealthCare.gov has published no data on Navigator or agent exchange plan performance.
Some states with state-run exchanges have published data suggesting that agents and brokers have been handling a growing share of enrollments, and that Navigators and other nonprofit enrollment workers and entities, such as “certified application counselors,” have had trouble keeping pace with agents and brokers.
In Colorado, for example, agents and brokers helped about 55% of all 2018 exchange enrollees, according to a Colorado exchange board meeting slidedeck.
2. Trump Administration Changes
The administration of President Donald Trump has put new pressure on the Navigators to show their work leads to people signing up for coverage, not just increased consumer awareness of health coverage options.
CMS Administrator Seema Verma said in a statement Tuesday that CMS wants to make sure the money it’s spending maximizes HealthCare.gov enrollment.
“It’s time for the Navigator program to evolve,” Verma said.
CMS announced a year ago that it was tying grant funding for the 2018 enrollment period to a Navigator entity’s success at getting people to sign up for coverage.
This year, CMS officials said:
- It will provide at least $100,000 in Navigator grants for each of the 34 HealthCare.gov states.
- It will let a state have just one Navigator, and it will be open to letting a Navigator provide services in a state through digital and online outreach efforts, without having a physical presence in that state.
- It will base grant funding on a Navigator entity’s past success at getting people covered and meeting other performance goals.
CMS also says it wants the moderate-income uninsured people who have been “left behind,” and are not eligible for rich ACA premium tax credit subsidies, to be made aware of coverage options other than individual major medical coverage.
Navigators should “provide targeted assistance to serve underserved or vulnerable populations” that “may be unaware of the full range of the different types of coverage options available to them, including coverage options in addition [exchange plans], such as association health plans and short-term, limited-duration insurance,” according to the Navigators program funding opportunity notice.
Navigators still cannot give consumer referrals to specific agents, brokers or insurers, but they’re supposed to help consumers find the HealthCare.gov agent finder tool.
Elsewhere, CMS officials made a point of noting that, although health insurance agents who are collecting commissions from health insurers for health insurance and stop-loss insurance cannot serve as Navigators, life insurance agents and other agents who get paid products to sell other types of insurance products can be Navigators.
CMS said it is welcoming Navigator applications from insurance agents and brokers as well as from community groups, unions, chambers of commerce, and trade groups.
HealthCare.gov managers are not the only ACA exchange managers with concerns about Navigator performance.
Managers of Covered California, a state-based exchange that has had a warm relationship with Navigator programs, said in a board meeting slidedeck posted in June that “Covered California remains committed to its Navigator program and the partnership with our grantees.”
But the Covered California managers also said that they “will actively engage our grantee partners in the development of a refreshed program that will build on existing expectations and provide robust incentives and rewards for continuing the good work of helping Californians get and keep health insurance coverage.”
Covered California said they have Navigator program data that “will assist in the development of new standards that may be used in the next grant period.”
3. Navigator Data
CMS recently reported that agents and brokers helped about 3.7 million people sign up for HealthCare.gov coverage for 2018, and that agents and brokers accounted for 42% of the 2018 enrollees.
CMS also indicated that the median agent and broker in the program handled about 50 2018 HealthCare.gov plan enrollees.
In the press release announcing the new Navigator grant program, CMS officials reported that Navigators handled “less than 1%” of the 8.7 million paid-up 2018 HealthCare.gov enrollees, or fewer than about 87,000 enrollees.
Calculations based on those figures suggest that the Navigator program cost HealthCare.gov an average of at least $400 per enrollment.
If the average HealthCare.gov Navigator enrollee had a monthly premium near the 2018 exchange plan average of $472 per month, that implies that the Navigators were getting the equivalent of a 7% agent commission.
Public figures on agent commissions in the individual major medical market are hard to find.
In 2013, when CMS was setting up the public exchange system, actuaries at Milliman estimated that insurers in California were paying commission rates of about 8% to 12% for new individual policy sales and 4% to 6% for renewals.
Vermont set its statutory 2018 exchange broker fee at $20 per month per enrollee, or $240 per year.
Agents have pointed out that, in many states, agent commissions are now under 2%, when commissions are paid at all.
Clarification: An earlier version of this article gave incomplete information about possible Navigator referrals and agent compensation levels. Navigators might give referrals for consumers interested in products such as short-term medical insurance to the HealthCare.gov finder tool. Current agent compensation levels in the individual major medical market appear to be much lower than they were in 2013 and, in some states, appear to be under 2% of the premiums, or non-existent.
— Read ACA Definitions: Enrollment Period Basics, on ThinkAdvisor.