APRIL 2014 Deciphering the Data: State-Based Marketplaces Spent Heavily to Help Enroll Consumers In-Brief The Affordable Care Act required that consumers have access to in-person or on-call assistance to understand their choices and “navigate” the complexities of the new health insurance marketplaces. One consequence of each state’s decision about whether to run its own marketplace is an extreme variation in the time-limited funding available for consumer assistance programs. This Data Brief looks at the types of assistance available and the level of funding for each state in the first year of marketplace operations, and analyzes the components of that variation. Background in states with a federally facilitated marketplace which they are trusted by the people using the (FFM). The partnership states could decide marketplaces. Recognizing that health insurance is a complex whether to take on consumer assistance product and that consumers would need help functions or rely on the federal government. In the 29 FFM states, as well as two partnership understanding their options and navigating a states, the federal government distributed $67 health insurance marketplace, the Affordable Consumer assistance programs fall within three million in Navigator funding, using a specific Care Act and subsequent regulations created categories: Navigators, In-Person Assisters (IPAs) formula based on the number of uninsured a number of consumer assistance programs. and Certified Application Counselors (CACs). residents under age 65. Each state received This was especially important given that a key While the duties of Navigators and other in- a minimum of $600,000, with the remainder target population was the uninsured, many of person assisters are fairly straightforward, with allocated by the state’s share of the number of whom were unfamiliar with the basics of health three types of marketplaces and three categories uninsured in FFM and partnership states. A total insurance. of programs, the scope and implementation of of 105 organizations received one-year, non- consumer assistance varies considerably across renewable Navigator grants in August 2013. Here we focus on programs that trained states. or certified people and organizations to The ACA required that SBM Navigator programs directly assist consumers in enrolling in the As initially conceived in the ACA, “Navigators” be funded by revenues generated by the marketplaces. The assister programs had would be funded and trained to conduct operations of the marketplace. States could outreach responsibilities, but are distinct from outreach and facilitate enrollment in the new not pay Navigators from their federal Exchange the broader education and outreach efforts marketplaces. The ACA also specified standards Establishment block grants (although the grants conducted by public and private groups (for to ensure Navigators are qualified, free of could be used for training and administrative example, Enroll America). conflicts of interest, and providers of fair and expenses). As a result, the SBM states had impartial information and services. A wide range a timing problem in funding their Navigator The assister programs were intended to operate of entities could run a Navigator program, such programs: they needed to conduct outreach and at the state level with funds going directly to as community non-profit groups, trade, industry, enrollment before their marketplaces started community centers or other entities already and professional organizations, ranching and generating revenues to become self-sustaining. operating within the state. States with a state- fishing associations, chambers of commerce, and Thus, the Department of Health and Human based marketplace (SBM) took on the role of unions. This broad array of potentially qualified Services (DHHS) created a similar, optional funding and selecting Navigator organizations, entities reflects the recognition that the success “In-Person Assister (IPA)” program that states while the federal government took on this role of Navigators would depend on the extent to could fund through the federal block grants, 1 April 2014 which totaled more than $3 billion. The 16 SBM states and DC and receive marketplace-specific training; SBM states had the could decide how much to spend on IPAs and how to disburse option of adding state-specific requirements for agent and broker the funds through September 2015. The five partnership states participation in the marketplace. Although agents and brokers with consumer assistance functions were required to have IPA played a large role in some marketplaces, we were unable to programs. Other than funding streams, there was little difference, measure the scope of these activities, and confine our analysis to in training or duties, between the Navigators and the IPAs. the three consumer assistance programs. By rule, all marketplaces were required to have a third type of What we did assister, called “Certified Application Counselors (CACs).” Many states have existing CAC organizations that help people enroll in We gathered data from various sources on state-level funding of Medicaid. CACs have similar functions to Navigators and IPAs, consumer assistance programs and rates of uninsurance. The but have less stringent training requirements. Unlike Navigators source of Navigator-specific funding for FFM and partnership states and IPAs, they are not required to conduct consumer education was the Centers for Medicare & Medicaid Services (CMS). SBM and outreach activities. CACs were not funded by these consumer spending on IPAs/Navigators came from September 2013 data assistance programs. However, they could receive funding through from the Kaiser Family Foundation (KFF). We also reviewed public other state or federal programs, such as Medicaid, and thus, documents and websites to update IPA information on states that funding varied by state. had not yet funded their programs when KFF gathered its data. We obtained data on Community Health Center funding for consumer In July 2013 the federal government awarded $150 million to assistance from the Health Resources and Services Administration fund consumer assistance in community health centers, allocated (HRSA), and the size of the eligible uninsured population under proportionately among federally-qualified health centers in each 65 in each state from CMS, who derived estimates from the state. More than 1100 centers received funds, at a base funding Census Bureau’s American Community Survey. Using these data, level of $55,000, and an additional amount allocated by the we calculated aggregate and per-uninsured funding levels. We grantees’ proportion of uninsured patients. In FFM and partnership looked at aggregate funding by type of marketplace, as well as states, health centers receiving this funding were required to the breakdown of funding by funding source. HIX 2.0, a database become designated CAC organizations; SBM states had the option of exchange information, is a one-stop-shop for all the data we of imposing this requirement on health centers in those states. used for this brief. We relied on the HIX 2.0 for its delineation of marketplace types to ascertain the consumer assistance The ACA specifically foresaw a role for licensed insurance agents responsibilities of the partnership states. For these purposes, and brokers in enrolling consumers in the marketplaces. In we included the two partnership states not running their own FFM and partnership states, agents and brokers could register Distribution of Eligible Uninsured Distribution of Consumer Assistance Population, by Marketplace Type Funding, by Marketplace Type 6% 17% 33% 31% 63% 50% Federally Facilitated Marketplaces State-Based Marketplaces State Consumer Partnership Marketplaces 2 April 2014 consumer assistance programs (Iowa and Michigan) in the FFM assistance functions were the only ones with access to all three category. funding streams: federal Navigator funding, IPA funding from exchange establishment grants, and community health center What we found funding. As a result, they had, on average, the highest per-uninsured funding levels. The FFMs were not able to draw on exchange By comparing consumer assistance funds to the uninsured, we grants for the more generous IPA funding and the SBMs were not found consumer assistance funds to be more concentrated in SBM states. SBMs accounted for 50% of total consumer assistance eligible for the less generous federal Navigator funding. Looking funds, although they have just 31% of all uninsured. In contrast, at the components of funding, we can see the importance of 63% of the uninsured live in FFM states, which accounted for 33% the community health center funding in the FFM states, where it of the funding. The five partnership states in charge of consumer accounted for 57%, compared to 26% in SBM states and 15% in assistance functions were home to just 6% of the uninsured, but partnership states. garnered 17% of the funding. We then calculated the total consumer assistance funds per On a state level, we found relatively small variations in FFM funding uninsured by marketplace type and found that states that run their for consumer assistance, ranging from $4.24 per uninsured in own marketplaces, on average, spent much more on consumer Georgia to $17.22 per uninsured in Alaska. This is not surprising, assistance than states that opted to defer to the federal government given that the FFM funds (beyond certain minimums) were allocated to run their marketplace ($17.15 per uninsured for SBMs vs. $5.42 based on the number of uninsured. per uninsured for FFMs). The highest spending was in the five partnership states responsible for consumer assistance ($31.53 per Much larger differences exist in SBM and partnership states, uninsured). because these states had great discretion as to how much from the large pool of Exchange Establishment grants they would devote The differences by marketplace type correspond to the differences to consumer assistance. SBM states ranged from a per-uninsured in funding eligibility. The five partnership states with consumer low of $6.18 for Nevada to highs of $87.86 in Hawaii and $163.93 in DC. The highest per-insured spenders have small uninsured populations, which suggests that fixed costs in launching these Consumer Assistance Funding Per Eligible programs might explain some of the differences. Uninsured, by Marketplace Type The five partnership states with consumer assistance functions were higher on average than the SBMs even though the range 35 between the highest and lowest partnership states was much less $31.53 than for SBMs. Funding ranged from $25.76 per uninsured in Illinois to $67.39 in Delaware. 30 What does it mean? 25 This analysis reveals extreme differences in the amount of funding available to states to help consumers enroll in the new marketplaces. Enrollment data to date suggests wide variations in 20 how successful states were in enrolling their eligible populations $17.15 in private plans, with SBMs and partnership states, in general, having more success than FFMs. It is still too early to tell how much 15 of this success can be ascribed to the greater levels of consumer assistance available to the SBMs and partnership states as they were launching their marketplaces. 10 Many other factors could be at play here. Our analysis does $5.42 not account for marketplace funds spent on broad marketing 5 campaigns or call centers, nor does it account for insurer initiatives to enroll new customers. For example, some states and insurers used enrollment buses and enrollment telethons. 0 Federally State Consumer State-Based Facilitated Partnership Marketplaces The effectiveness of the Navigators themselves might have differed Marketplaces Marketplaces from state to state, especially in states that create barriers to CHC Funds Navigator Funds IPA/State Funds assister programs. Many states passed laws to restrict activities of consumer assistance programs, sometimes requiring assisters to 3 April 2014 Consumer Assistance Funding per Eligible Uninsured, by State District of Columbia* Hawaii* Vermont Maryland Colorado State-Based Marketplace Minnesota Rhode Island New Mexico Massachusetts New York Connecticut Idaho Washington California Oregon Kentucky Nevada Delaware State Consumer Marketplaces Partnership New Hampshire Arkansas West Virginia Illinois Iowa (partner) Michigan (partner) Alaska North Dakota Maine South Dakota Montana Wyoming Kansas Mississippi North Carolina Federally Facilitated Marketplace Nebraska Utah Alabama New Jersey South Carolina Missouri Tennessee Wisconsin Pennsylvania Louisiana Oklahoma Ohio Virginia Indiana Arizona Florida Texas Georgia $0.00 $10 $20 $30 $40 $50 $60 $70 $80 CHC Funds Navigator Funds IPA State Funds (* District of Columbia, total = $163.90, Hawaii, total = $87.86) 4 April 2014 obtain credentials beyond federal requirements. A number of these resources for consumer assistance run out and are replaced next laws have been overturned in federal courts. year by much smaller amounts generated by marketplace revenues. It is also unclear how the variation in consumer assistance funding The future funding of consumer assistance is uncertain. Two funding interacted with each state’s decision whether or not to expand streams—the federal Navigator and IPA grants—account for nearly Medicaid. The combination of funding for community health centers two-thirds of the funding we report here and are scheduled to run and extensive use of CACs might have been especially helpful out at the end of the year. The establishment grants that SBM states in reaching and enrolling the uninsured in states that expanded used to fund IPA programs will not be awarded beyond 2014. The Medicaid. FFM Navigator grants were one-time only, and subsequent funding beyond revenues raised by each marketplace is unclear. Going This natural variation in first-year funding provides an excellent forward, it is likely that community health centers will continue to be opportunity to study, both qualitatively and quantitatively, the central in consumer assistance efforts. For 2014, the Department outcomes of one of the largest outreach and consumer assistance of Health and Human Services (DHHS) awarded $58 million in efforts the United States has ever undertaken. Such research one-time funding to community health centers for outreach and could give us insights into the most effective use of resources, both enrollment assistance (not included in our present analysis). For FY public and private, financial and non-financial, as states prepare 2015, it has stated its commitment to outreach and enrollment as for subsequent open enrollment periods in the health insurance an ongoing health center activity, and anticipates annualizing its July marketplaces. These insights will be critical as these large pools of 2013 funding amounts into each center’s base funding. 5 About the Authors This Data Brief was written by Daniel E. Polsky, PhD, MPP, Janet Weiner, MPH, Christopher Colameco, and Nora Becker. About The Leonard Davis Institute of Health Economics The Leonard Davis Institute of Health Economics (LDI) is the University of Pennsylvania’s center for research, policy analysis, and education on the medical, economic, and social issues that influence how health care is organized, financed, managed, and delivered. LDI, founded in 1967, is one of the first university programs to successfully cultivate collaborative multidisciplinary scholarship. It is a cooperative venture among Penn’s health professions, business, and communications schools (Medicine, Wharton, Nursing, Dental Medicine, Law School, and Annenberg School for Communication) and the Children’s Hospital of Philadelphia, with linkages to other Penn schools, including Arts & Sciences, Education, Social Policy and Practice, and Veterinary Medicine. About the Robert Wood Johnson Foundation For more than 40 years the Robert Wood Johnson Foundation has worked to improve the health and health care of all Americans. We are striving to build a national culture of health that will enable all Americans to live longer, healthier lives now and for generations to come. For more information, visit www.rwjf.org. Follow the Foundation on Twitter at www.rwjf.org/twitter or on Facebook at www.rwjf.org/facebook.