CMS reduces navigator funding to $10 million

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The Centers for Medicare and Medicaid Services has reduced funding for the Affordable Care Act Navigator Program to $10 million, ultimately with the goal of reducing premiums.

According to CMS, the savings from the reduction will allow Federally-Facilitated Exchanges (FFEs) to focus more on strategies that improve outcomes, and to reduce the user fee in future years, thereby translating into a reduction in premiums.

The change is expected to primarily benefit those who are enrolled without subsidies who pay the full premium for their insurance, said CMS. 

The majority of people enrolled in ACA plans receive subsidies. In 2024, 20.1 million of the 21.6 million people who enrolled received enhanced subsidies, according to the Congressional Budget Office

Despite receiving $98 million in the 2024 plan year, navigators only enrolled 92,000 consumers – just 0.6% of plan selections during the open enrollment period – at a cost of $1,061 per enrollment, CMS said. And the average cost per enrollment exceeded $3,000 for 12 of the 56 Navigator grantee organizations.

Navigators also enrolled 0.6% of total enrollments through FFEs during the 2019 plan year – the year before the COVID-19 pandemic – at a lower cost of about $10 million, which CMS said reflected a more efficient $211 per enrollment.

WHAT’S THE IMPACT

The navigator program is funded by user fees, and according to CMS, the decrease in funding to $10 million per year will save a total of $360 million over the next four years of the five-year period of performance, which began August 27, 2024, and runs through August 26, 2029.

Because the user fee is directly passed through to the premium that health insurers charge, CMS said savings from the navigator program supports lower premiums for consumers in the individual health insurance market. People who don’t qualify for federal premium subsidies are expected to directly benefit from lower premiums, and translate to less federal spending on premium subsidies.

This change is for navigators in the states with FFEs in the next grant period for plan year 2026. States operating state-based exchanges and state-based exchanges operating on the federal platform are responsible for determining the funding available for navigator programs in their states, CMS said.

The agency cited data showing that for the 2019 plan year, Navigators provided post-enrollment assistance to about 205,000 consumers. Despite more funding and higher enrollment levels, the level of post-enrollment assistance dropped to roughly 86,000 consumers for the 2024 plan year.

“Overall, navigator performance data shows that the current level of funding does not represent a reasonable return on investment,” CMS said. “These numbers indicate that Navigators are not enrolling nearly enough people to justify the substantial amount of federal dollars previously spent on the program.”

THE LARGER TREND

President Barack Obama signed the ACA into law in 2010, and navigators were announced in 2013. 

Under President Donald Trump in 2019, CMS cut navigator funding from $36 million to $10 million for 2019. CMS said at the time that the number of people who enrolled through the program didn’t justify the millions of federal dollars spent.

Last year the American Hospital Association voiced its support for healthcare navigators in a letter to CMS, citing a report detailing evidence that patients are often hesitant to pursue financial assistance. This is either because they believe they won’t qualify or are apprehensive about providing the information required to complete the application. 

Other hospitals report difficulties connecting with patients who may be eligible for financial assistance following care, requiring them to reach out several times, often without success.

Moreover, the AHA said that financial assistance programs were originally designed to support uninsured patients, not those who need help closing coverage gaps.

Navigators, the group said, are already trusted community resources for navigating health insurance coverage and would be a great asset in helping to reach patients who are otherwise not accessing financial assistance.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.