With funding slashed and no contracts in hand, ACA marketplace ‘navigators’ are shutting down

(This story was updated at 6:10 p.m.)

Navigator groups that help educate and enroll consumers in the Affordable Care Act insurance exchanges are shutting down because the federal government isn’t paying them.

Several navigator organizations, including the University of South Florida, which received the country’s largest federal grant for navigation services in 2016, are suspending education and outreach activities ahead of the 2018 open enrollment period that is slated to begin Nov. 1.

The navigators say they haven’t received contracts from HHS that would fund them for the upcoming enrollment period, and they haven’t received any notice about when or if they will receive those contracts, which were supposed to start on Sept. 2. Health reform experts predict that without adequate navigator services, enrollment in the exchanges will plummet.

Jodi Ray, the director of the Florida Covering Kids Families program at the University of South Florida, said the university’s 11 subgrantee organizations, which together employ 150 navigators, have all suspended work. The university received the largest navigator grant at $5.9 million in 2016. “We have no idea what kind of funding we’re going to get,” she said. “If anybody works, they are working at their own risk.”

Another Florida navigator group, the Epilepsy Foundation of Florida, is shutting down its navigator operations immediately and firing its navigation employees.

In a letter to staff sent Friday, foundation CEO Karen Egozi, said she hasn’t received any notice from the federal government about when or if there will be a contract.

HHS officials declined to comment for this story.

“The timing couldn’t be worse,” Egozi said in a statement. “We are hopeful that funding will be secure sooner than later, but without that assurance, we are unable to financially sustain our navigation workforce working in 35 counties in Florida.”

The Epilepsy Foundation of Florida is the second-largest navigator grant winner in the state, behind the University of South Florida. In 2016, it was awarded almost $1.8 million in federal grants to help enroll consumers in exchange coverage over a three-year period.

At the end of August, the CMS announced plans to slash funding for navigator groups by about 40%, but the agency did not indicate it would stop funding navigation services altogether.

The CMS said it intends to provide navigator programs with about $39.5 million in grants, down from $62.5 million in grants awarded last year. The CMS also said it plans to tie the grants to how well navigator groups met enrollment goals last year, which will help “ensure accountability.”

Navigators successfully enrolled 81,426 individuals during the 2017 open-enrollment period, according to the CMS, noting that 17 navigators enrolled fewer than 100 people each at an average cost of $5,000 per each enrollee, and 78% of navigators failed to achieve their enrollment goal.

Additionally, the CMS is gutting the ACA marketing and outreach budget and spending just $10 million during the next open-enrollment period, down from the $100 million in funding that the Obama administration budgeted last year.

Navigators help educate and enroll consumers in the ACA exchanges. Beyond the in-person assistance they provide, they teach consumers about insurance, help them understand their premiums, and even assist with Medicaid enrollment.

Healthcare reform experts predict that drastically reducing navigator funds will lead to declines in exchange enrollment.

“The administration wants to limit enrollment opportunities, and this is one of the many ways they are doing that,” said Elizabeth Hagan, associate director of coverage initiatives at Families USA, a consumer advocacy group.

Hagan said consumers that receive in-person assistance when enrolling in the marketplaces are twice as likely to enroll successfully. Many of the individuals who seek the help of navigators are African-American or Latino, so those populations will be affected most by the lack of funding, she said.

Having to suspend operations will also be administratively costly for navigator groups. Navigators who aren’t getting paid will eventually look for new jobs, Ray of the University of South Florida explained. If that happens and funding later comes through, Ray said she will have to hire new staff who will need to go through a 20-hour training session, background checks and finger printing, which will squeeze her budget.

Moreover, there’s a steep learning curve for navigators, and replacing talent won’t be easy, she said.