Role of Navigators Still Up in the Air

Few provisions of the health reform law have scared or angered brokers as much as the creation of navigators – unlicensed individuals and organizations that are being given grants to apparently compete with health insurance agents by helping people enroll in qualified coverage. Or at least, brokers were scared and angry when they first heard about the program.

As time has passed, the exchange has opened, and many of the major provisions of the law have gone into effect, brokers seem a lot less nervous about navigators taking all their business than they used to be, in much the same way that brokers now realize isn’t the “do it yourself” option the government initially promised – instead of being replaced by a website, brokers are still very much needed by individuals shopping for health insurance.

But should brokers be worried about navigators? Is their role expanding?

Maybe. The program did get off to a very slow start since HHS was so late in getting the training online and states struggled to come up with additional ways to prevent them from doing the job the law asks them to do – contact individuals who may be eligible for Medicaid or government subsidies through the new marketplace.

In Texas, for instance, the state legislature finalized the rules for navigator training last week. While softening its original stance just a bit, the state is requiring navigators to undergo 20 hours of additional training on top of the federal requirement. Governor Perry had originally proposed 40 hours of additional training for navigators, and there would have been a gag rule that, according to the Dallas Morning News, “could prevent navigators from helping consumers sort out the pros and cons of policies offered in the federal government’s health insurance marketplace.”

As the article explains, “[t]here are an estimated 200 navigators in Texas, hired at a federal cost of nearly $11 million.” But the new law will make it difficult for them to do their job, and “Democrats and supporters of the federal health overhaul have accused Texas officials of trying to undercut the success of the state’s online exchange.”

Texas, like a number of other states, passed its strict law after reports surfaced about navigators encouraging applicants to lie about their income in order to qualify for bigger subsidies. The navigator program has been under even more scrutiny ever since.

But these state laws, aimed at reducing the role of navigators, could be hurt by a January 23rd ruling by a Federal district judge blocking a similar law in Missouri that would have limited the role of ACA navigators. As USA Today reports, “States that decided to use the federal health care exchange instead of creating one of their own can’t limit how those exchanges operate, including limiting the work by navigators who aid consumers buying health insurance.” While this ruling is specific to Missouri, it could have implications for Texas and about a dozen other states that have also made life difficult for navigators.

Either way, brokers shouldn’t feel too threatened. Many navigators, like the United Way in Texas, will be enrolling more people in Medicaid than they will in private plans, so they’re not really targeting the same group that most insurance agents are. And even if they were, so what. If 200 unlicensed individuals in a state as big as Texas can really enroll so many people that it hurts the business that agents are doing, then something’s wrong with the way agents are doing their job.

The real question is whether the program is worth it, and the short answer is probably not. Sticking with the Texas example, if it cost the federal government $11 million to hire 200 unlicensed individuals, that comes out to $55,000 per person. If the government, instead, had given 200 independent agents $55,000 each to hire an assistant, chances are pretty good that they could have enrolled a lot more individuals – and given them better advice – than these navigators will be able to do.

The good news is that, for far less than $55,000, you can set up a private exchange site that will increase your sales capacity and help you enroll a lot more individuals than a navigator possibly can.

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