Feds slash the budget for program that helped 65,000 Texans enroll for health insurance

About this time of year, Foundation Communities would be getting its latest group of specially trained staff members ready to help more than 6,800 Central Texans sign up for Affordable Care Act insurance coverage.

For years, the Austin-based housing nonprofit has, through its Prosper Health Coverage program, used about $2.4 million in federal grant funding each year to hire a team of "navigators," who help enroll Texans who either don't have health insurance through their workplace or do not qualify for Medicaid and would like coverage in the federal health insurance marketplace established under the Affordable Care Act.

Unlike insurance brokers, who earn a commission for each ACA enrollee, the work of navigators rarely stops once an ACA plan is selected, often connecting the uninsured to other programs.

In the 2023-24 fiscal year, the latest figure available, navigators enrolled about 26,533 Texans and steered another 38,549 people to Medicaid.

"Navigators … often helped Texans find other help they may not have considered or thought they were ineligible for, like Child Insurance Health Plans or the Supplemental Nutrition Assistance Program," said Ericka Leos, director of Prosper Programs for Foundation Communities.

But after the federal government gutted 90% of the national ACA navigator program budget, Foundation Communities will see no federal grant this year. As a result, this small seasonal workforce will be tinier as nonprofits either lean more on donors to help fund the extra navigator effort or rely on current staff and a team of volunteers to do the navigator job. Open enrollment, the period during which participants choose a health insurance plan, starts Nov. 1.

Texas received $17 million in navigator grants from the federal government last year.

To be fair, most of the nearly 4 million Texans covered by an ACA plan don't use a navigator to enroll in ACA. Nationally, navigators enroll 1% of ACA participants. Most sign up for ACA coverage on their own through Healthcare.gov or through an insurance broker, the latter of whom will receive a commission from health insurance providers.

However, nonprofit professionals and health providers point out that navigators — a feature of the ACA since it rolled out in 2013 — are a critical tool to bring more of the state's uninsured into regular health care. It's the main reason Travis County's hospital district, Central Health, is stepping in, giving Foundation Communities $1.2 million this year so the organization can continue to reach the uninsured.

Unlike a broker, ACA navigators do not stop working once open enrollment ends in December. Instead, navigators, who often take the role of a social worker, follow up with ACA participants to smooth out any problems, like locating a provider and answering follow-up questions about coverage. They also help Texans who don't realize they qualify for Medicaid to enroll in that more heavily subsidized health insurance program.

"They just go above and beyond," Kit Abney Spelce, Central Health's vice president of operations, said of Foundation Communities' navigators' work.

The ACA and the navigator role

Since the ACA's first open enrollment period in 2013, the federal government has issued grants to states to hire navigators.

In February, the Centers for Medicare & Medicaid Services (CMS) stated that the return on the navigator investment was too low, and as it did during the first Trump administration, it reduced the amount of the grants. This year, the national navigator budget went from $98 million to $10 million. Trump administration officials believe the reduction would allow the insurance exchanges to operate more efficiently, which would translate into a reduction in premiums.

"It was tremendously scaled back," said Dr. John Carlo, the chief executive officer of Prism North Texas, a federal qualified health center, which has used the grants in years past to hire navigators.

According to the CMS website, navigators wound up signing up less than 1% of ACA enrollees, costing the feds $1,061 in navigator funding for each enrollee.

"Despite receiving $98 million in the 2024 plan year, Navigators only enrolled 92,000 consumers — just 0.6 percent of plan selections," according to a CMS statement in February. "Overall, Navigator performance data shows that the current level of funding does not represent a reasonable return on investment."

But Carlo said the federal calculation fails to consider the navigator program's bigger impact: bringing in uninsured individuals who previously either relied on costly emergency room treatment or avoided health care completely, perhaps worsening chronic conditions that could be more cheaply managed if caught earlier.

"It is a mischaracterization to deem the program without value simply because it did not have the performance based on numbers of enrolled," he said. "Consider for example how many unnecessary emergency room visits are saved in our county hospital emergency rooms when someone is insured and thus has access to good primary care."

Because they are supposed to be inherently neutral compared to brokers, navigators tend to bring a human touch to what can otherwise be a tedious, bureaucratic chore: signing up for health insurance, navigator supporters say.

"They've become trusted resources for people who otherwise would not seek out health insurance," said Lynn Cowles, director of health and food justice at Every Texan, a left-leaning policy group that advocates for better health access for Texans.

Federal statistics also fail to tell the local impact story, Leos of Foundation Communities said.

During the 2023-24 enrollment period, Foundation Communities enrolled 6,853 in 12 Central Texas counties with a cost of $268 per enrollee. If federal funding were restored, Leos' program would hire more people, train more staff and rely less on volunteers. The organization would also spend more time on outreach and education to bring even more of Texas' uninsured population into a health plan.

"With our current funding, we will still serve people from any Texas county, but we will only be able to focus our outreach efforts on six counties," she said.

For now, Central Health has stepped up to give the nonprofit about half of what it would have received from the federal government. Helping Foundation Communities' experience with ACA and Medicaid recipients helps the hospital district keep costs down.

"Because they are agnostic, [and] not getting compensation from any plan, they really spend the time to talk about what is your health status," said Abney Spelce of Central Health. "Do you have any chronic conditions? Let's talk about your medication. That's another thing we feel that's important for our community."

Amine Salim, a broker with EastWest Life & Health Insurance Brokers in Austin, concedes that while he does receive a commission from health insurance providers when enrolling ACA participants, his goal is always to find the best plan for his clients.

"I am, all the time, on the side of the client," he said. Salim also points out that he, too, follows up with clients if they have any questions or concerns about using their policy.

ACA, Medicaid and Texas' uninsured rate

Texas' uninsured rate of about 17% remains the highest of any state, a position it has held since before the Affordable Care Act was passed in 2010 and the first plans launched three years later.

Partly driving the high uninsured rate is that, unlike most states, the Texas Medicaid program does not cover health care for working-age single or childless adults. It is considered one of the more restrictive Medicaid programs in the nation, and Texas is one of only 10 states that have refused to expand enrollment criteria to include more people.

Instead, today's 4.4 million Medicaid participants are mostly low-income young mothers, their children and the poorest disabled and elderly individuals.

Helping to insure many Texans who don't qualify for Medicaid but can't afford ACA coverage, the Biden administration in 2021 moved to reduce the cost of ACA plan premiums by enhancing subsidies called the ACA premium tax credit, sending many more Texans to ACA plans. From 2021 to last year, the number of ACA participants more than doubled, from 1.3 million Texans on ACA plans to about 4 million. Texas has the fastest-growing number of ACA participants of any state.

Alongside those subsidies, the federal government also increased the amount of navigator grants to Texas — from about $2 million in 2020-21 to nearly $15 million the following fiscal year and then $17 million last year.

As demand for the plans has soared, there's a lot of trepidation this year about soaring premium costs and whether those tax credits will be allowed to expire. Democrats are pushing for them to be extended, but so far Republicans have resisted, resulting in the federal government shutdown that began on Oct. 1.

Considering ACA plan premiums could rise by as much as 18% this year because of rising costs and the anticipated expiration of tax credits, many believe that more, not less, assistance will be needed when open enrollment begins Nov. 1.

"It is having, again, a trusted community partner who understands the importance and the nuances," Abney Spelce said. "Again, trying to navigate something like that on your own is really challenging."