Navigator & "Risk Adjustment" Update
Navigator & “Risk Adjustment” Update
by Christoper E. Condeluci, Principal and sole shareholder of CC Law & Policy PLLC in Washington, D.C.
HHS Continues to Limit Funding for the Navigator Program
- HHS announced that the Department was once again limiting funding for the ACA’s Navigator Program. The announcement comes on the heels of HHS reporting that – based on the Department’s data – less than 1% of enrollment in an ACA Exchange plan was facilitated by Navigators. That is in comparison to 42% of Exchange plan enrollment facilitated by agents and brokers through Healthcare.gov. The remainder of enrollment came through automatic re-enrollment or consumers enrolling on their own through Healthcare.gov or a State-based Exchange web site.
- Analysis: ACA supporters and the media have come out with a full-throated rebuke of the current Administration’s decision to once again limit funding for Navigators. Their continued refrain: “Limiting funding for Navigators is yet another example of President Trump’s efforts to ‘sabotage’ the markets.” The Trump HHS counters these claims, pointing out that Navigators are NOT doing a good job of enrolling people in an ACA Exchange plan (again, less than 1% of Exchange enrollment was facilitated by Navigators). Sooo, HHS is saying that this funding decision is not an attempt to “sabotage” the market, but rather, the decision is a prudent one because the Department is spending a-heck-of-a-lot of taxpayer dollars to support a program (here the Navigator Program) that is NOT producing positive results. In other words, there is NO bang-for-the-buck. And the best decision is to re-deploy these taxpayers dollars to something more productive. I too do NOT believe that limiting the funding for Navigators is purposeful “sabotage.” Instead, I do believe the decision was driven by the data that showed that Navigators were NOT enrolling that many consumers in an ACA Exchange plan. Sooo, why spend a lot of money on a program that is NOT furthering the policy goal of getting more people enrolled in a health plan? There are arguably more efficient ways to achieve that policy goal for a lower cost. In prior updates, I have argued that a better use of taxpayer dollars is investing in information technology (IT) that would allow the private-sector to enroll consumers in ACA Exchange plans through their own third-party web site. This private-sector model is referred to as “direct enrollment.” The previous Administration introduced the concept of “direct enrollment” through implementing Exchange regulations that were issued back in 2012. But, without specific technology in place, “direct enrollment” was limited. The current Administration has continued to build on the previous Administration’s efforts to develop IT that would streamline the “direct enrollment” process. And for the 2019 “open enrollment” period (which begins on Nov. 1, 2018), HHS will have in place its “Enhanced Direct Enrollment” pathway. What is “Enhanced Direct Enrollment”? I provided an explanation in a prior update (from the week of April 2nd). Instead of attaching that prior update to this email, I have cut and pasted my post below:
Enhanced Direct Enrollment and 2019 “Open Enrollment”
- Analysis: What is Enhanced Direct Enrollment? In short, Enhanced Direct Enrollment will allow a consumer to shop for an ACA Exchange plan without ever going to the Federal Exchange’s Healthcare.gov web site. Here, a third-party website will serve as the enrollment platform where a consumer can shop for Exchange plan coverage, and the consumer will STILL be able to access a premium subsidy. Here’s how it will work in practice:
- A consumer will access the third-party web site on-line. The consumer will then enter the same information the consumer would have otherwise entered on Healthcare.gov. Then, through a secure, streamlined “web service,” the consumer’s information will be shared with HHS’s Federal Data Services Hub to determine if the consumer is eligible for a premium subsidy, and if eligible, the amount of the subsidy. If a consumer is found eligible, information will be sent back to the third-party web site, informing the consumer of the premium subsidy amount they may use to purchase an Exchange plan. Then, the consumer will shop for coverage, purchase a plan, and complete the enrollment process by, for example, paying their first month’s premium payment. All on the third-party web site. Stakeholders have waited a long time for the Enhanced Direct Enrollment technology to be operational. Dating all the way back to 2014, stakeholders have pushed HHS to develop the technology, and to get the technology incorporated into Healthcare.gov’s IT infrastructure at least by the 2015 “open enrollment” period. But, the only direct enrollment process the previous Administration could provide to third-party web sites was something called the “double re-direct.” Why was it called the “double re-direct”? While third-party web sites were able to enroll consumers in an Exchange plan (where the consumer could still access a premium subsidy), when a consumer accessed the third-party web site, the site was required to direct the consumer to Healthcare.gov to enter their information for premium subsidy eligibility purposes, then the consumer was directed back to the third-party web site to shop for a plan, and once the consumer selected a plan, the consumer was directed yet again back to Healthcare.gov to complete their enrollment. As I am sure you have surmised, the Enhanced Direct Enrollment process will eliminate the double re-direct. Again, meaning that a consumer can stay on a third-party web site during the entire shopping experience for an Exchange plan. I believe this is significant because I think Enhanced Direct Enrollment will help facilitate more sign-ups next year (and in future years). And, as I have continually said in prior updates, I believe the taxpayer dollars spent on Enhanced Direct Enrollment will provide a better-bang-for-the-government’s-buck relative to spending on marketing and outreach (as discussed above). Why? Well for one, these third-party web sites are going to do their own marketing and outreach so they can attract consumers to their sites. To me, this means that these private-sector companies are going to be doing the marketing and outreach for the government…essentially, for free. And, such outreach and marketing efforts undertaken by private-sector companies will likely outperform similar efforts undertaken by the Federal government. Enhanced Direct Enrollment is also significant because – while only a few private-sector companies will have the technology and the system’s in place by the beginning of the 2019 “open enrollment” period to take advantage of the new Enhanced Direct Enrollment process – if this technology works, this will put us on a path to shutting down Healthcare.gov, at least for enrollment in Exchange plans. In other words, if Enhanced Direct Enrollment works – and if more private-sector companies get into the direct enrollment game – the Federal government could (and should) shift the responsibility of enrolling consumers in an Exchange plan to the private-sector. Healthcare.gov would continue to operate. BUT, Healthcare.gov would only serve as an enrollment platform for Medicaid beneficiaries. Last comment: Enhanced Direct Enrollment is NOT for every consumer. HHS has identified instances where a third-party web site will have to direct a consumer to Healthcare.gov or through the double re-direct process. For example, a third-party web site using the Enhanced Direct Enrollment pathway must conduct “identity proofing” to determine if a consumer is who they say they are, and also a U.S. citizen. If the third-party site has difficulty identifying the consumer, the site must direct the consumer to Healthcare.gov or direct them to the double re-direct process. Also, if the third-party site does not have the capabilities to enroll certain “types” of consumers (e.g., stepchildren, people who don’t provide a Social Security Number, incarcerated applicants, American Indian and Alaskan Native applicants), the site must direct these consumers to Healthcare.gov or to the double re-direct. Stay tuned for more on the Enhanced Direct Enrollment process in the coming months.
Let’s Get Back to Talking About Navigators (no news story)
- An argument that I do think is legit (when it comes to limiting funding for Navigators) is this: “Although Navigators have enrolled less than 1% of consumers in an ACA Exchange plan, Navigators have been instrumental in enrolling people in Medicaid.” Unfortunately, HHS has not released any data on how many people Navigators have enrolled in Medicaid to do an apples-to-apples comparison of (1) ACA Exchange enrollment versus (2) Medicaid enrollment. This data would be helpful – at least in my opinion – to determine the value of keeping the Navigator Program around. But what is most interesting – at least to me – is that Congress NEVER intended the Navigators to spend most of their time enrolling people in Medicaid.
- Analysis: What I mean is this: Congress specifically created the Navigators to enroll consumers in a health plan sold through the ACA Exchanges. The statute itself does NOT say that the Navigators should and could enroll individuals in Medicaid. But, as the previous Administration began implementing the ACA, the Navigators were used as a means through which consumers eligible for Medicaid could be enrolled in the Medicaid program. Why did Congress limit the Navigators to enrollment in an ACA Exchange plan? First, because the drafters of the ACA never envisioned that the previous Administration would use the ACA Exchanges – and the Exchange infrastructure that Congress created through the statute – to enroll people in Medicaid. But, that is essentially what the previous Administration did. They piggy-backed off of the enrollment platform – and the concept of providing assisted-enrollment in health insurance – to not only enroll people in an “individual” market, but also to enroll people in Medicaid. This shift in using the ACA Exchanges – and the Exchange infrastructure – to enroll people in Medicaid made some sense. After all, the vast majority of individuals who are seeking to enroll in an individual market Exchange plan are lower-income. And, many of these individuals – it turns out – have incomes so low that they qualify for Medicaid coverage. It also makes sense because people’s incomes often times fluctuate. For example, in some years an individual may be eligible for Medicaid, but the next year have income high enough to qualify for a premium subsidy for an Exchange plan, while the following year they have income low enough to once again be eligible for Medicaid (and NOT eligible for a premium subsidy any longer). Dealing with this income fluctuation – and churn between Medicaid and private insurance – has proven problematic for the government and the insurance carriers. But having the Navigators around – and having these “assistors” help guide low-income people through the process of enrolling in Medicaid and/or enrolling in an Exchange plan – was extremely beneficial to the enrollment process in each of these markets. The second – and primary – reason why Congress limited the Navigators to enrollment in an ACA Exchange plan was this: The drafters of the ACA wanted to cut agents and brokers out of the enrollment process. As you have heard me say a couple of years back (wow, it has really been that long), the drafters of the ACA felt that agents/brokers were an unnecessary cost. Stated differently, the drafters felt that the commissions that were paid to agents/brokers added to the cost of purchasing health insurance, and as a way to cut out these added costs (thereby reducing premiums by a couple percentage points), the drafters decided to enact policies geared toward cutting agents/brokers out of the system. The drafters also wanted to cut out agents/brokers because they thought agents/brokers engaged in anti-consumer activity like “steering” individuals to plans that paid out the highest commissions, as opposed to plans that best fit an individual’s needs. BUT, the drafters of the ACA did realize that if they cut out agents/brokers, they would be cutting out a well-established distributional channel. And, cutting out this well-established distributional channel could adversely affect enrollment numbers in the newly reformed ACA markets. Soooo, the drafters came up with the Navigators to replace agents/brokers as a distributional channel through which consumers could enroll in an individual market plan. In the end, the Navigators did NOT replace agents/brokers as the primary facilitators of enrollment in an ACA Exchange plan. As I mentioned above, HHS tells us that currently about 42% of enrollment through Healthcare.gov was facilitated through an agent/broker. Some State-based Exchanges have an even higher percentage of agent/broker enrollment in their Exchange plans. Also, in the end, Navigators are proving to be better at enrolling people in Medicaid. Which – at least to me – does NOT mean that the Navigators should be eliminated entirely. Instead, we should all accept the reality that Navigators are good at enrolling people in Medicaid, and therefore, recognize that these “assistors” still play a valuable role in getting people health coverage. Sooo, if you want to continue funding the Navigator Program, you should set aside funds under the Medicaid program, instead of HHS’s budget devoted to enrolling consumers in an Exchange plan. Just sayin.’
“Risk Adjustment” Update
HHS Issues Guidance Relating to the Department’s Suspension of the “Risk Adjustment” Payouts and Pay-Ins
- Last week, HHS issued some guidance relating to the suspension of the “risk adjustment” payouts to insurance carriers owed money under the program and the collections from those carriers required to pay into the program.
- Analysis: While most were hoping the guidance would provide an explanation on when and how HHS is going to reinstate the payouts and start collecting the pay-ins, the guidance merely explains how the “hold” on the risk adjustment payouts and pay-ins will impact other ACA-related provisions like Medical Loss Ratio (MLR) reporting. The guidance also informs insurance carriers that they must continue sharing specific plan data with HHS. HHS further explains that the risk adjustment appeals process (for appealing prior year payouts/pay-ins) is on hold too, but carriers must continue to pay the risk adjustment user fee for 2017. HHS also reminded carriers and States that – in accordance with new requirements included in the 2019 Notice of Benefit and Payment Parameters – States can request a reduction in the risk adjustment payouts and pay-ins by up to 50% for the 2020 plan year. When it comes to providing guidance on 2019 premium rates, HHS merely said that the carriers should “speak to your State Department of Insurance.” At this point, no one knows when and how HHS will reinstate the 2017 risk adjustment payouts and pay-ins. As I mentioned last week, many policy analysts believe HHS can issue an Interim Final Rule (IFR) that explains why the Department is assuming the risk adjustment program should be operated on a “budget neutral basis” (as a means to curing the “process foul” that the led to the New Mexico court ruling that the risk adjustment program for 2014 to 2018 was invalid). However, some have questioned whether HHS has the authority to issue this type of IFR. We all remain in suspense as to what HHS can and cannot do. Maybe Congress will resolve the issue here by enacting legislation, ensuring that HHS can indeed reinstate the risk adjustment payouts and pay-ins for 2017 and 2018. The legislation may also ensure that HHS does NOT have to go back and re-collect amounts paid out to carriers during 2014, 2015, and 2016. We are hearing rumblings that Congress may try to act before the August recess. Stay tuned.