KFF: Biden admin has more than $1B in unspent funds to help bolster ACA exchanges

The Trump administration may have accumulated more than $1 billion in unspent user fee funds that can be used to bolster the Affordable Care Act (ACA) if President Joe Biden starts a special enrollment period, a new analysis finds.

The analysis, released Monday by the Kaiser Family Foundation, outlined ways the Biden administration could improve sign-ups for the ACA’s insurance exchanges, especially as job losses from the COVID-19 pandemic have spurred interest in the exchanges.

Biden is reportedly going to sign an executive order Thursday that will initiate a new open enrollment for the ACA, according to a report in The Hill.

Insurers on the exchanges are required to pay user fees, which finance marketplace expenses such as marketing.

But a review from Kaiser found the Trump administration acquired more than $1 billion over fiscal years 2018-20. The surplus comes as the Trump administration cut spending on outreach such as the navigator program and the federal call center as well as marketing.

“Because of these spending reductions, marketplace expenses were cut below the level of user fee revenue collected,” the analysis said.

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A final rule passed in the waning days of the Trump administration would also decrease the user fee from 3% to 2.5% starting in the 2022 coverage year.

“Unless changed by the new administration, this reduction in the user fee rate would make it difficult for the federal marketplace to reverse cuts in spending on consumer information, outreach and assistance activities,” Kaiser said.

Kaiser also spoke with a group of ACA navigators earlier this month on how to improve enrollment outcomes.

The navigators told Kaiser that a special enrollment period to help people who may have experienced difficulties signing up due to the pandemic was needed as the current open enrollment for the 2021 coverage year closed Dec. 15.

They also stressed the need to invest substantially to publicize a new enrollment period and have targeted outreach for some consumers, including non-English speaking citizens.

“Outreach from trusted individuals and community-based organizations could be undertaken to reach such consumers, particularly during a special enrollment period,” the analysis said.

Any special enrollment period also needs to address issues that have stemmed from economic pain due to the pandemic. For example, the issues included difficulties in estimating income for the year because of job losses.

Navigators added that if there is a special period, more money is needed for them to help with outreach.

The Trump administration cut navigator funding to $10 million, less than 10% the amount the Obama administration gave in the first enrollment period of $108 million, Kaiser said. The administration said back in 2017 that the navigator program didn’t lead to enough sign-ups, but navigators have responded that they also helped get people signed up for other programs such as Medicaid.

“While a few federal navigator programs have been able to find supplemental funding resources from their states or foundations, others have had to substantially reduce capacity as a result of federal funding cuts,” the analysis said. “For example, one statewide program that used to employ 30 full-time navigators now has 6.”