The wide variation in spending to hire and train navigators and others to assist consumers in the first year of the new marketplaces could have a major impact on how many people actually get coverage under the new health law, experts say.
Yet states with some of the nation’s highest uninsured rates, such as Florida and Texas, are getting far less federal money per uninsured resident than states with low rates, such as Maryland, Vermont and Rhode Island, according to a Kaiser Health News analysis.
That’s because states relying on the federal government to run their marketplaces are getting far less money than states setting them up themselves as a result of how the health law was written. In addition, some states such as Maryland that are running their own operations are supplementing the federal dollars with their own funds.
“The spending difference could have a huge impact,” said Jon Kingsdale, a consultant who helped launch the Massachusetts health insurance exchange in 2006.
Consumer assistance is considered key to enrolling the uninsured for several reasons. Polls show most people are unfamiliar with the law’s benefits, including new government subsidies that take effect next year. For example, those subsidies will apply to a family of four with an income as high as $94,000.
The online marketplaces, which open for enrollment Oct. 1, were envisioned to be as easy to use as travel Web sites such as Expedia, but experts say that many people will need help figuring out which plan is best for them and what information they might need to sign up for coverage.
Some have never applied for health insurance coverage and may need assistance even to navigate the Web site, said Sonya Schwartz, program director of the National Academy for State Health Policy, and project director of State Refor(u)m, a discussion forum about implementation.
The marketplaces, also known as exchanges, are the key way the law expands health coverage to about 27 million people by 2016. That’s where people will shop for and enroll in private coverage and determine whether they are eligible for premium discounts, or for Medicaid, the state-federal health insurance program for the poor. Although many customers will not yet have insurance, others with coverage will use the exchanges to take advantage of government subsidies.
“It’s a shame that we see states with lower rates of uninsured putting more money into education and outreach than states with higher rates of uninsured,” said Deborah Bachrach, a former New York state Medicaid director who is special counsel at the law firm Manatt Phelps & Phillips.
To be sure, consumer assistance is only one way that potential enrollees can learn about new insurance options and how to sign up for them. Additional federal dollars will go to advertising on radio, television and billboards. And insurers, hospitals and nonprofit groups may supplement public education efforts in many states.
The biggest reason for the uneven spending on consumer assistance is that when Congress passed the health law in 2010, it assumed most states would run the online marketplaces, and it authorized broad funding for that. As it turned out, only 16 states and the District of Columbia agreed to do so.
The law did not set aside money for the federal government to operate the marketplaces, either alone or in partnership with the states, as it is doing in at least 34 states. To remedy that, the Obama administration recently moved $54 million from the law’s prevention fund to provide money to hire and train people to assist consumers in those states, based on their number of uninsured.
That money will be awarded directly to organizations that agree to hire and train people to assist consumers. Those eligible include church groups, local health agencies, community health centers and chambers of commerce.
“This is a huge challenge,” said Laura Goodhue, executive director of Florida CHAIN, a consumer advocacy group. “As community-based groups start to really plan and get ready for October, they are realizing just how difficult a job they will have and how the funding will only go so far.”
She estimates that 1.7 million people in Florida could benefit from subsidized coverage in the marketplace run by the federal government, but few know it will exist.
“We are equally concerned about a lack of consumer assistance or any type of consumer advocacy at the state level to help resolve issues related to enrollment and eligibility,” she said.
Texas, with the nation’s highest uninsured rate of about 24 percent, will get as much as $8 million to enroll about 5 million uninsured people in a federally run marketplace. That’s less than $2 per uninsured resident — compared with about $31 per person in Maryland.
Virginia, with 845,000 uninsured, is getting $1.4 million for consumer assistance to help people sign up for its federally run marketplace.
Several states with high rates of uninsured are running their own marketplaces, and as a result, have more money for consumer assistance. New York, for instance, expects to spend up to $32 million on consumer assistance.
A handful of states, including Maryland and Vermont, are spending state taxpayer money to supplement their federal grants. Maryland has put up $8.5 million on top of the $16 million it got from the federal government for consumer assistance. Vermont, which has about 55,000 uninsured, has put up $400,000, for a total of $2 million.
In Maryland, the money will pay for 300 consumer assistance jobs created by six groups, including county health agencies and nonprofit groups.
The Baltimore area is getting $7.9 million of that to help find and enroll about 220,000 uninsured. That will be coordinated by HealthCare Access Maryland (HCAM), a nonprofit group that helps people get coverage, which will work closely with hospitals, the YMCA, homeless shelters, community health centers and religious groups.
Asked about how Baltimore will have more money for consumer assistance than the entire state of Florida, HCAM chief executive Kathleen Westcoat laughed.
“Maryland is putting its money where its mouth is,” she said.
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.