CMS slashes ACA marketplace education and outreach funds

(Updated at 6:20 p.m. ET)

The CMS said it will spend $10 million on marketing and outreach for the 2018 Affordable Care Act open enrollment period beginning Nov. 1—a fraction of the $100 million that the Obama administration budgeted last year.

The agency said the new budget is in line with spending on outreach for Medicare Advantage and Part D programs.

The CMS is also planning to cut funds for "navigators," which help enroll consumers in the ACA exchanges. Funding for navigators, which received $62.5 million in grants last year, will be tied to how well they met enrollment goals last year.

Health reform experts say marketing and outreach is critical to the success of open enrollment, which has been shortened this year to end on Dec. 15. Normally, the enrollment period ends Jan. 31.

Margaret Murray, CEO of the Association for Community Affiliated Plans, said the decision to cut advertising is disappointing and will make it harder to attract younger consumers who don't prioritize health insurance.

"We're concerned this will depress enrollment particularly among younger, healthier people," Murray said. "Our plans are committed to getting people in, but you need the force of the federal government."

For a stable individual insurance market, insurers must enroll enough healthy people to balance out the older, sicker and costlier population that has dominated the exchanges. Without a balanced risk pool, premiums will continue to rise.

The Trump administration has slashed outreach before. During the final weeks of the 2017 open enrollment, the administration pulled back on HealthCare.gov ads to cut costs. Former Obama administration officials at the time accused the administration of "sabotage," and industry experts blamed the move for lower exchange enrollment.

About 12.2 million people enrolled in the exchanges during the 2017 open enrollment period, compared with 12.7 million the year before. As of mid-March, 10.3 million people had paid their premiums and had an active policy.

Some states have taken outreach into their own hands. In California, for example, the state-based exchange is pumping $5 million additional dollars into its marketing budget to promote enrollment in 2018. Typically, the exchange, called Covered California, has an annual marketing budget of $100 million, but said it will spend $111 million on radio and TV ads and a direct-mail campaign during this year's open enrollment.

An edited version of this story can also be found in Modern Healthcare's Sept. 4 print edition.