New Sheriff In Town: House Energy & Commerce Committee demands answers to questions I asked a year ago!
That should mean that the average HC.gov premium is around $600 or so per month in 2018. The 3.5% surcharge hasn't changed for 2018, which means the federal exchange should take in something like $252/year per enrollee. Total enrollment in HC.gov plans was down 5% this year, so I'll assume average effectuated enrollment will be as well...somewhere around7.13 million per month. That means ~$1.8 billion in HC.gov revenue directly from the premium surcharge.
All of this brings me to my question:
- Last summer the Trump administration announced that they were slashing their advertising budget by 90%, from $100 million to just $10 million.
- They also announced that they were slashing $23 million out of the navigator/outreach program for open enrollment.
- That means they cut HealthCare.Gov's total budget by $113 million.
So my question is this: Where exactly did that money go?
For that matter, assuming HC.gov is set to bring in $300 million more this year, but doesn't plan on reinstating that $113 million for advertising/outreach, doesn't that mean they should be profiting by over $400 million? Again, if so, where is that money going?
...If this money is all going back into the HHS Dept's general fund, I guess that's OK...or, if they announce that they're lowering the 3.5% surcharge down to 3% or 2.5% or whatever to shave a few bucks off of the unsubsidized premiums, that's fine as well (although I'd rather they reinstate the ad/outreach funding).
However, according to the Proposed HHS Notice of Benefit and Payment Parameters for 2019 Fact Sheet...
FFE and SBE-FP User Fees We propose to maintain the user fee rates at 3.5 percent of premium for FFEs, and propose to set the user fee for SBE-FPs at 3.0 percent of premium for the 2019 benefit year. This represents an increase for SBE-FP states from 2.0 percent established for the 2018 benefit year.
Yes, that's right--not only is HC.gov going to keep charging 3.5% of premiums for the 34 states which are fully handled by the federal exchange next year, they're actually increasing the fee for the 5 "piggybacking" states by a point. In fact, this fee increase is exactly what is leading Nevada to move off of HC.gov onto their own exchange next year.
DEMOCRATIC HEALTH LEADERS QUESTION TRUMP ADMINISTRATION’S USE OF ACA MARKETPLACE USER FEES
Jan 10, 2019
“Congress and the American public are entitled to understand how CMS is spending these funds”
House and Senate Democratic health leaders sent a letter to Health and Human Services (HHS) Secretary Alex Azar and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma today requesting detailed information on the Trump Administration’s spending of user fees generated by the Affordable Care Act (ACA) Marketplace exchanges, including HealthCare.gov.
The letter was signed by Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ), Ways and Means Chairman Richard Neal (D-MA), Education and Labor Chairman Bobby Scott (D-VA), Senate Finance Ranking Member Ron Wyden (D-OR), and Senate HELP Ranking Member Patty Murray (D-WA).
“The Administration’s record of undermining enrollment in the Marketplaces, including by cutting funding for vital functions such as marketing and outreach, as well as spending agency funds on ‘repeal and replace’ propaganda, raises questions about whether the dedicated funding is being spent effectively, legally, and appropriately to enhance Americans’ access to comprehensive health insurance,” the Democrats wrote.
Last year, CMS made the decision to gut funding for consumer outreach and assistance for enrolling in the Marketplaces, reducing funding from $100 million to just $10 million — a 90 percent cut. The agency also slashed funding for navigator programs by 40 percent.
“Given the agency’s clear intent to undermine enrollment in the Marketplaces by reducing funding for vitally important Marketplace functions, it is unclear why CMS continues to charge states that use the federal platform a 3.5 percent user fee,” the Democrats continued in their letter to Azar and Verma. “Congress and the American public are entitled to understand how CMS is spending these funds, which likely represent billions of dollars in federal spending, and whether the agency is using them solely for the purpose of supporting the functions of the Federal Marketplace.”
CMS also recently decided to increase the user fee rate for State-Based Marketplaces that employ the federal platform from 2 percent to 3 percent. The five health leaders wrote that states that use the federal platform are entitled to understand how these funds are being spent and whether they are getting good value for their dollars, so they can determine if they want to continue to employ the federal platform.
As part of their inquiry, the Democrats are requesting a series of documents related to the Trump Administration’s use of user fees collected, including:
- The overall amount of user fees collected, as well as a detailed accounting of how these funds were spent in each year;
- Detail on what capital investments have been made to improve the functioning of the Federal Marketplace in 2017 and 2018, as well as any plans for future investments;
- A briefing on the Administration’s outreach and enrollment expenditures for 2019 Marketplace plans.
I don't know for certain whether any of the Democratic Congressmen or Senators were tipped off by my blog post, of course, but I do know that this issue was on the radar of Reps Pallone, Neal and Scott back on March 5, 2018...when the three members of Congress introduced what I termed their "ACA 2.0" bill:
Section 304 Promote transparency and accountability in the Administration’s expenditures of exchange user fees.
It is unclear how the Trump Administration is spending the funds raised from a user fee levied on issuers that is intended to be spent on exchange operations and outreach and enrollment, and whether all of those uses are appropriate. For example, during 2017, the Trump Administration appears to have spent agency money filming anti-ACA propaganda videos. The legislation requires HHS to submit an annual report to Congress that includes a detailed breakdown of the Department’s spending on outreach and enrollment, navigators, maintenance of Healthcare.gov, and operation of the Healthcare.gov call centers.
Oh yeah...and then there's this...