|March 2, 2011||Posted by ITUP under California HBEX, Insurance Exchange, Workgroups||
Envisioning the Role of Navigators in the California Health Benefit Exchange
Micah Weinberg, New America Foundation
Cliff Sarkin, Insure the Uninsured Project
The health benefit exchanges – among federal health reform’s most novel and exciting components – will eventually make it easier and cheaper for individuals and small businesses to compare plans and buy health insurance. The exchanges are designed to enhance competition and offer lower price coverage options by expanding purchasing power, competition and transparency.
Yet, simply creating an exchange and making options available will not be enough. Outreach to, education for, and enrollment of those eligible for the California Health Benefit Exchange will be a herculean task, one central to the success of reform in our state. Hence, we may have too few rather than too many people working to enroll Californians in coverage. This does not necessarily mean that everyone will operate in the same space, capacity or organizational setting or with the same incentives. In fact, there will likely be a need for various kinds of outreach and enrollment activities. It will be important to anticipate the needs of the new world and to adapt accordingly through changing business models, forging new connections, and perhaps creating new types of organizations.
Federal reform envisions one model in particular to assist with exchange education, enrollment and retention: the Navigators. There are already many different perspectives on what these Navigators could and should do as well as who they should or should not be. It is important to understand the geographic and demographic need that the Navigators will fill and begin to develop a vision for the Navigator program, a vision that is as broad as possible, one that includes the successful activities of existing organizations and initiatives in California and that seamlessly complements the work of those who will be paid by fees or commissions.
Federal & State Exchange Law – A Selected Summary
The Patient Protection and Affordable Care Act (ACA) requires each state to establish an exchange to serve the individual and small employer markets on and after January 1, 2014. According to Assembly Bill 1602 (Perez) of 2010, one of the two pieces of legislation that established an exchange here in California, the California Benefit Exchange (Exchange) is to facilitate the purchase of qualified health plans (QHPs) by qualified individuals and qualified small employers no later than January 1, 2014. The Exchange will determine and approve cost-sharing provisions for QHPs, and in each California region, the Exchange will provide a choice of QHPs at the federally specified “precious metal” levels, plus a catastrophic coverage option.
There will be two sides of the Exchange, the individual pool and “Small Business Health Options Program” or SHOP exchange. Those with incomes between 133% ($14,000 for an individual) and 400% ($88,000 for a family of four) of the Federal Poverty Level (FPL) qualify for refundable tax credits in individual pool. They will have to pay premiums on a sliding scale, between 2% and 9.5% of their income, with the option to pay their share of the premium directly to the QHP. The table to the right reflects the sliding-scale contribution that Exchange plan enrollees can be expected to pay.
The amount of the tax credit that a person will receive in the Exchange will be based on the premium for the second lowest cost silver plan in the Exchange and area where the person is eligible to purchase coverage. A silver plan is a plan that provides the essential benefits and has an actuarial value of 70%. The amount of the tax credit varies with income such that the premium that the premium a person would have to pay for the second lowest cost silver plan would not exceed the specified percentage above. According to AB 1602, the Exchange may collect premiums and assist in the administration of subsidies with respect to individual coverage made available in the Exchange.
While the ACA allows states to choose whether to provide the individual and SHOP services through single or separate entities, California chose to establish California’s SHOP as a pool separate from the individual market pool. AB 1602 did, however, require the Exchange Board administer both sides of the Exchange. In 2014, the SHOP will be open to employers with or less 50 full time employees (FTE), and in 2017, 100 or fewer FTE. The Exchange will collect premiums for the SHOP and administer other necessary tasks (including enrollment and plan payment) “in order to make the offering of employee plan choice as simple as possible for qualified small employers.” Approximately 456,500 California businesses will be eligible for SHOP coverage, roughly 80% of all businesses in the state. Of these 135,900 will be eligible for the maximum tax credit.
Federal & State Navigator Law
Subsection (i) of Section 1311 of the ACA contains the provisions for federal health reform pertinent to the Navigator Program. That subsection includes: (1) the requirement that an exchange establish a Navigator program, (2) eligibility requirements for entities to receive a Navigator grant, (3) the kinds of entitles that may be Navigators, (4) the kinds of entitles that cannot be Navigators, (5) activities that a Navigator grantee must perform, and (6) activities in which a Navigator grantee may not engage. The ACA calls for the federal Secretary of Health and Human Services (HHS) to establish “standards” for Navigators, including ensuring Navigators are qualified, engage in appropriate activities, and avoid conflict of interests.
The state law on Navigators is contained in Section 7 of AB 1602, encoded in Section 100503 of California’s Government Code. It requires the Exchange Board to establish California’s Navigator Program, and repeats verbatim the five Navigator duties outlined in Section 1311(i)(3) of the ACA. State law also empowers the Exchange to select and set performance standards and compensation for Navigators. Legislative language for both the ACA and AB 1602 is attached as an Appendix.
Navigator Duties & Responsibilities
According to the ACA, Navigators grantees must:
- Make available information that is fair, accurate and impartial;
- Conduct public education activities to raise awareness of plans in the Exchange;
- Facilitate enrollment in qualified health plans;
- Provide referrals for any enrollee with a grievance, complaint, or question regarding their health plan, coverage, or a determination under such plan or coverage; and
- Provide culturally and linguistically appropriate information for the population being served by the Exchange.
ACA §1311(i)(4) specifically bars a Navigator grantee from one action: receiving consideration (i.e. commission or reimbursement) directly or indirectly from any health insurance issuer in connection with the enrollment of any qualified individuals or employees of a qualified employer in a qualified health plan.
Who May & May Not Be a Navigator
The ACA refers to potential Navigator grantees as “any private or public entity that is selected as a navigator,” which suggests that the federal law appears to allows for private (for profit and not for profit) as well as public entities (agencies, counties, cities, etc.) to be navigators.
To be eligible, an entity must have “existing relationships, or could readily establish relationships, with employers and employees, consumers (including uninsured and underinsured consumers), or self-employed individuals likely to be qualified to enroll in a qualified health plan.”
Under Section 1311(i)(3) of the ACA, the following are listed as entities that may be Navigator grantees:
- Trade, industry, and professional associations,
- Commercial fishing industry organizations,
- Ranching and farming organizations,
- Community and consumer-focused nonprofit groups,
- Chambers of commerce,
- Small business development centers,
- Licensed insurance agents and brokers, and
- Other entities that can carry out the required duties, meet the required standards and provide fair, impartial and accurate information.
The ACA bars specifically one entity from being a Navigator grantee: health insurance issuers. Other than entities that don’t meet the eligibility criteria or cannot perform the required duties, there are no other named entities explicitly barred from becoming Navigator grantees.
Navigators, particularly those aimed at the lower income levels in the individual pool, will need to have sufficient language capacities, be culturally competent, and know the local healthcare environment of various communities around the state. Many community based organizations and enrollment assistors currently serve in these capacities across the state. Navigators for the SHOP and higher income levels in the individual pool will also need cultural and linguistic competency as well as relationships with employers and an understanding of private market insurance.
Potential Conflicts of Interest
As noted above, a central function that any Navigator grantee will be required to perform is the distribution of fair and impartial information concerning enrollment in QHPs and the availability of premium tax credits. This requirement may conflict out some entities as potential Navigator grantees. For instance, consider a provider that contracts with some but not all of the carriers in the Exchange, and that provider applies for and wants to be an Exchange Navigator. It seems that provider will have an incentive to steer his/her patient to an Exchange plan with which he/she contracts, rather than providing “fair and impartial” information on all QHPs as the ACA requires. While further guidance from HHS and state standards will shed more light on potential conflicts of interest and the degree to which requirements like these will be read narrowly or broadly, it is important to note that some entities with clear incentives that prevent them from distributing fair and impartial information may be precluded from being considered as Navigator grantees.
Navigator Grant Funding
Neither the ACA nor state law limits how much money an exchange may grant to Navigator grantees, and neither requires a minimum amount be spent on such grants. The ACA does, however, note that no federal Establishment of the Exchange Grant money can be used as Navigator grants; instead, such grants “shall be made from the operational funds of the Exchange.” We can assume that in California these operational funds will come from the “reasonable charge” assessed on QHPs participating in the California Exchange in order to support the development, operations, and management of the Exchange.
Population Demographics in the Exchange
According to the ULCA Center for Health Policy Research’s recent analysis of the 2009 California Health Interview Survey (CHIS), there are more than 7 million uninsured Californians. Almost 4.7 million of them will be eligible for some form of subsidized insurance as a result of the ACA: 3 million for Medi-Cal, 1.73 million for subsidies in the Exchange, and 1.2 million for the Exchange without subsidies. The Exchange will also be open to more than those currently uninsured (insured in the private individual insurance market, the under-insured, and those in small group coverage). We estimate that there will be almost 3.8 million Californians eligible for the Exchange.
It is worth noting that this number might ultimately be even higher. With the 2007 CHIS data, ULCA estimated that as a result of health reform, 1.7 million Californians will be newly eligible for Medi-Cal. In their analysis of the 2009 data, UCLA estimates this number to be just over 3 million. Clearly, this increased estimation reflects the economic recession and the recent growth of the population of poor and low-income Californians. One may suspect that as the economy improves over the next 2- 3 years and some of these people regain employment, they will then become eligible for coverage through the Exchange, increasing the total population of Exchange-eligible Californians.
Even with a perfectly user-friendly Exchange enrollment system, there will be a great need for public and private outreach and a high-functioning response network. According to recent HHS Guidance, “[s]uccessful Exchanges will undertake aggressive and multi-faceted outreach to inform the public of their services and coverage options.” Currently, in California as in many other states, there is substantial and pervasive misunderstanding about health reform generally and the Exchange in particular. In fact, 31% of small businesses recently surveyed had never heard of the California Health Benefit Exchange. Given the parameters of Navigator grantees’ duties, as outlined above, the ACA envisions Navigator grantees assuming at least some part of this responsibility.
Determining the precise scope of the activities of the Navigators will be critical as will figuring out how this program complements or supplants the activities of the many organizations currently active in this space. These organizations have an interest, and therefore should be involved, in figuring out how to structure and run this new program as they have expertise and networks that should be leveraged for these tasks. Come January 1, 2014, hundreds of thousands, if not millions, of Californians, some of whom have never had insurance coverage before, will begin enrolling in subsidized health insurance coverage through the California Health Benefit Exchange. If California is able to design and implement a Navigator program that is relevant to, reflective of, and helpful for the various populations seeking information about and access to new coverage options, the Navigator grantees can and will be integral guides that help ensure the success of federal reform implementation in the state.
APPENDIX – Navigator Language
Navigator Language from Section 1311(i) of the ACA.
(1) IN GENERAL- An Exchange shall establish a program under which it awards grants to entities described in paragraph (2) to carry out the duties described in paragraph (3).
(A) IN GENERAL- To be eligible to receive a grant under paragraph (1), an entity shall demonstrate to the Exchange involved that the entity has existing relationships, or could readily establish relationships, with employers and employees, consumers (including uninsured and underinsured consumers), or self-employed individuals likely to be qualified to enroll in a qualified health plan.
(B) TYPES- Entities described in subparagraph (A) may include trade, industry, and professional associations, commercial fishing industry organizations, ranching and farming organizations, community and consumer-focused nonprofit groups, chambers of commerce, unions, small business development centers, other licensed insurance agents and brokers, and other entities that-
(i) are capable of carrying out the duties described in paragraph (3);
(ii) meet the standards described in paragraph (4); and
(iii) provide information consistent with the standards developed under paragraph (5).
(3) DUTIES- An entity that serves as a navigator under a grant under this subsection shall–
(A) conduct public education activities to raise awareness of the availability of qualified health plans;
(B) distribute fair and impartial information concerning enrollment in qualified health plans, and the availability of premium tax credits under section 36B of the Internal Revenue Code of 1986 and cost-sharing reductions under section 1402;
(C) facilitate enrollment in qualified health plans;
(D) provide referrals to any applicable office of health insurance consumer assistance or health insurance ombudsman established under section 2793 of the Public Health Service Act, or any other appropriate State agency or agencies, for any enrollee with a grievance, complaint, or question regarding their health plan, coverage, or a determination under such plan or coverage; and
(E) provide information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the Exchange or Exchanges.
(A) IN GENERAL- The Secretary shall establish standards for navigators under this subsection, including provisions to ensure that any private or public entity that is selected as a navigator is qualified, and licensed if appropriate, to engage in the navigator activities described in this subsection and to avoid conflicts of interest. Under such standards, a navigator shall not–
(i) be a health insurance issuer; or
(ii) receive any consideration directly or indirectly from any health insurance issuer in connection with the enrollment of any qualified individuals or employees of a qualified employer in a qualified health plan.
(5) FAIR AND IMPARTIAL INFORMATION AND SERVICES- The Secretary, in collaboration with States, shall develop standards to ensure that information made available by navigators is fair, accurate, and impartial.
(6) FUNDING- Grants under this subsection shall be made from the operational funds of the Exchange and not Federal funds received by the State to establish the Exchange.
Navigator Language from Section 7 of AB 1602.
Section 100503 is added to the Government Code, to read:
100503. In addition to meeting the minimum requirements of Section 1311 of the federal act, the board shall do all of the following:
(i) Establish the navigator program in accordance with subdivision (i) of Section 1311 of the federal act. Any entity chosen by the Exchange as a navigator shall do all of the following:
(1) Conduct public education activities to raise awareness of the availability of qualified health plans.
(2) Distribute fair and impartial information concerning enrollment in qualified health plans, and the availability of premium tax credits under Section 36B of the Internal Revenue Code of 1986 and cost-sharing reductions under Section 1402 of the federal act.
(3) Facilitate enrollment in qualified health plans.
(4) Provide referrals to any applicable office of health insurance consumer assistance or health insurance ombudsman established under Section 2793 of the federal Public Health Service Act, or any other appropriate state agency or agencies, for any enrollee with a grievance, complaint, or question regarding his or her health plan, coverage, or a determination under that plan or coverage.
(5) Provide information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the Exchange.
 Families USA and Small Business Majority, A Helping Hand for Small Businesses: Health Insurance Tax Credits, July 2010, available at http://www.familiesusa.org/assets/pdfs/health-reform/CA-Helping-Small-Businesses.pdf.
 Alex Lavarreda and Livier Cabezas, Two Thirds of California’s Seven Million Uninsured May Obtain Coverage Under Health Care Reform, Health Policy Research Brief, Feb. 2011, available at http://www.healthpolicy.ucla.edu/pubs/files/twothirdspb-2-2011.pdf
 We reach this number by adding the number of uninsured Californians eligible for the Exchange with subsidies (1,736,00), the number of uninsured Californians eligible for the Exchange without subsidies (1,203,000), and the number of individuals currently purchasing private coverage (849,000).
 Alex Lavarreda and E. Richard Brown, National Health Care Reform Will Help Four Million Uninsured Adults and Children in California, Health Policy Factsheet, Oct. 2009, available at http://www.healthpolicy.ucla.edu/pubs/files/HCR_FS_10-09.pdf.
 Department of Health and Human Services, Initial Guidance to States on Exchanges, Nov. 18, 2010, available at http://www.hhs.gov/ociio/regulations/guidance_to_states_on_exchanges.html.
 Small Business Majority, Opinion Survey: Small Business Owners’ Views on Key Provisions of the Patient Protection and Affordable Care Act, Jan. 4, 2011, available at http://www.smallbusinessmajority.org/small-business-research/small-business-healthcare-survey.php