CMS To Maintain Navigator Funding At $10 Million For 2020, 2021

On May 23, 2019, the Centers for Medicare and Medicaid Services (CMS) released a new funding opportunity announcement for the navigator program for 2020 and 2021, as well as a series of frequently asked questions and an overview of the application process. CMS intends to fund the navigator program in the 34 states with a federally facilitated marketplace at $10 million per year, for a total of $20 million.

The amount of funding for navigators is unchanged from last year’s significant cuts. The $10 million in annual funding is down from a high of $63 million for the 2017 plan year. Since the Trump administration took office, the navigator program has been cut by about 84 percent.

These funding cuts have had an impact. For 2019, the number of navigator organizations dropped by about half—from more than 80 organizations for 2018 to only 39 grantees for 2019. Three states (Iowa, Montana, and New Hampshire) had no navigators at all, and entire areas of some states (such as Cleveland and Dallas) are not served by the navigator program.

To justify its efforts to scale back the navigator program, CMS cites what it believes is heightened public awareness of the marketplace and new coverage options as well as the increased role of private sector partners. Navigators will continue to be required to prioritize assistance to uninsured individuals who are unaware of their coverage options through the marketplace or through non-ACA options, such as association health plans and short-term plans.

Applications are due on July 22. CMS expects to award 25 to 50 grants that will range from $100,000 to up to $1.3 million per state. Grant awards will be announced on August 29th.

Background On The Navigator Program

Section 1311(i) of the Affordable Care Act (ACA) requires health insurance marketplaces to establish a navigator program. Navigators are organizations that must have (or can readily build) relationships with employers, employees, uninsured and underinsured consumers, or self-employed individuals who likely qualify to enroll in qualified health plans (QHPs). The navigator program was modeled after other successful outreach efforts for public coverage programs, such as Medicaid, CHIP, and the State Health Insurance Assistance Programs (for Medicare).

Among other duties, navigators must: 1) conduct public education activities to raise awareness of the availability of QHPs; 2) distribute fair and impartial information concerning enrollment in QHPs and the availability of premium tax credits and cost-sharing reductions; 3) facilitate enrollment in QHPs; and 4) provide information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the marketplace. Navigators may be organizations such as trade, industry, and professional associations; chambers of commerce; ranching and farming organizations; and community and consumer-focused nonprofit organizations. 

Historically, navigator organizations have been trusted local organizations such as United Way affiliates, universities, health systems, legal aid societies, and patient advocacy organizations. Some navigator grantees oversaw a consortium of organizations to maximize their collective ability to reach vulnerable, hard-to-reach, or disproportionately uninsured communities.

The Obama administration finalized initial regulations on the navigator program in March 2012. These regulations largely mirrored the ACA’s statutory requirements and required marketplaces to develop, for instance, conflict of interest and training standards. Each marketplace was required to have at least two navigator entities; of these, at least one entity had to be a community and consumer-focused nonprofit group. Agents and brokers were allowed to serve as navigators but required to comply with conflict of interest standards. Navigators were barred from receiving direct or indirect compensation from insurers in connection with enrollment (whether that enrollment is in QHPs or non-QHPs).

Some of these standards have been modified in additional regulations over time. States have also adopted legislation to regulate navigators; some of these state laws have been successfully challenged in court for being overly burdensome.

In the payment rule for 2019, CMS scaled back the navigator program by eliminating the requirement that each marketplace have at least two navigator entities and that one of these entities be a community and consumer-focused nonprofit group. The rule also eliminated the requirement that navigators maintain a physical presence in a marketplace service area. CMS made additional changes to the navigator program in the payment rule for 2020 by eliminating a requirement that navigators provide post-enrollment assistance and scaling back explicit training requirements. These recent changes are reflected in the new funding announcement.

Prior to 2017, the navigator program had been funded at a minimum of $60 million each year to cover federally funded enrollment, outreach, and public education activities in the 34 states using the federal marketplace. For 2014 and 2015, CMS issued annual funding opportunities. In 2015, CMS announced that it would move forward with a three-year agreement with navigators (and an expectation of awarding up to $201 million over those three years). For 2016 and 2017, CMS provided $60 million and $63 million, respectively, in navigator funding.

For the 2018 plan year—the third year of the agreement—CMS notified grantees of the availability of $60 million in May 2017. However, on August 31, 2017, CMS unexpectedly announced a 40 percent cut to navigator funding, down to $36.8 million. CMS asserted that funding decisions were made based on performance in reaching “enrollment goals.” However, the agency has faced criticism for being inaccurate in its performance measurement and for underrepresenting the scope of work that navigators do (such as year-round education and outreach in addition to enrollment).

As noted above, the funding cuts and changes made to the navigator program for the 2019 plan year had a significant impact. For 2019, funding for the navigator program was reduced even further to just $10 million, leaving three states and major metropolitan areas without any navigators. Highly experienced navigator organizations did not apply for funding, did not receive funding, or saw their funding reduced significantly. An overview of the 2019 navigator program, including state-specific data on the impact of the funding cuts, is available from the Kaiser Family Foundation.

Navigator cuts have received attention in Congress and in the courts. Recent omnibus legislation passed by the U.S. House of Representatives would direct $100 million annually to the navigator program. These funds would come from the federal marketplace user fees, which totaled nearly $1.85 billion in 2018. The bill also reverses changes made by the Trump administration in prior regulations (such as those requiring there to be at least two navigators in each state). In court, the navigator cuts are one of the actions cited by plaintiffs challenging Trump administration actions as evidence of the administration’s “death-by-a-thousand-cuts campaign” to destabilize the ACA.

Funding Announcement For 2020 And 2021

For 2020 and 2021, CMS expects to award up to $10 million annually in navigator grants. This amount will be proportioned out amongst the 34 states with a federally facilitated marketplace based on the number of remaining uninsured consumers as of 2017. As in previous years, organizations can apply to be a navigator in multiple states by submitting a single application. To the extent that a state transitions away from a federal marketplace, federal navigator funding in that state would end and the unused funds would be returned to CMS.

States are divided into six funding tiers that range from a minimum of $100,000 in total navigator funding for each of the 12 states in the first tier to $1.3 million for each of two states (Florida and Texas) in the sixth tier. The states in each tier are relatively the same as last year. Louisiana, New Jersey, and Pennsylvania all moved down one tier, meaning the navigator programs in those states are eligible for $100,000 less than last year.

But the navigator programs in the states in the three highest tiers will each receive an additional $50,000 relative to last year. For instance, Georgia and North Carolina are both on the fifth funding tier. Last year, those states’ navigator programs could receive up to $500,000; for the next two years, that amount is increased to $550,000.

Proposals should address the entire two-year period, but funding for the second year is contingent on performance, compliance, and the availability of funds. CMS will assess performance based on the measures that navigators identify in their application and the quality and timeliness of reporting, among other standards. Grantees will have to submit a continuation application within 90 days of the end of their first budget period. The continuation application is treated as a non-competitive financial assistance request for the remaining year.

Beyond the two-year funding proposal, there are no notable differences from last year’s funding opportunity. As noted above, CMS will continue to prioritize outreach and enrollment to the “left behind” population, which it defines as individuals who are disproportionately uninsured and unaware of coverage options such as QHPs but also unaware of non-ACA-compliant plans such as association health plans and short-term plans. Applicants that focus on this population, while also being prepared to assist other consumers, will score higher and can identify or propose additional “left behind” populations in their application. Consistent with last year, CMS highlighted the use of “innovative cost-effective strategies” for education and outreach and will require navigator applicants to explicitly disclose how they inform consumers about the coverage of abortion services.