An ObamaCare program that advises consumers on their new health insurance options is sparking fights across the country from critics who say it puts consumers at risk of fraud.
Eighteen states have enacted or are considering legislation to apply tougher requirements to “navigators,” the people and organizations who will help patients shop for health insurance on the Affordable Care Act’s new marketplaces.
The Obama administration argues that navigators are an essential part of unbiased consumer outreach under healthcare reform.
And supporters of the law also accuse traditional insurance brokers of fueling the fights in an effort protect their business.
“The agents see navigators as competition,” said Jay Angoff, a former senior adviser to Health and Human Services (HHS) Secretary Kathleen Sebelius.
“If I was an insurance agent, I would be threatened by an entity that had the legal duty to provide fair and impartial information about insurance.”
Navigators were envisioned as community-based groups that would help people unfamiliar with health coverage through the process of selecting it. They are not allowed to enroll consumers in the marketplaces or select plans on their behalf.
Churches, senior organizations and healthcare advocates are expected to participate as underserved patients join the health insurance market for the first time.
Final rules released on Friday require the navigators to undergo training, meet regular certification standards and receive ongoing education about benefits under the Affordable Care Act.
The regulations allow states to impose their own requirements on navigators as long as the rules do not interfere with federal statute.
Many states have already taken this opportunity, passing or considering bills that require navigators to obtain state licenses or pass criminal background checks.
Insurance brokers say these rules are vital to ensuring consumers are protected in the new system.
“The state laws are a positive development,” said Ryan Young, senior director of government affairs at the Independent Insurance Agents and Brokers of America, which has been a resource to state policymakers.
Young added that navigators should be required to attain professional liability insurance so that consumers have recourse if the counselor makes a mistake.
“What we have is a federal program authorizing individuals and entities with no healthcare background to go out and advise folks on health insurance,” he said.
“We just want to make sure they’re properly licensed, trained and overseen.”
Traditional insurance brokers are expected to compete with navigators for business in some cases.
While licensed agents are technically permitted to be navigators, no participant is allowed to receive money from health insurance companies, which is how brokers are usually compensated.
Supporters of the navigator program worry that some state laws are so strict that they will prevent navigators from operating altogether.
In Missouri, one statute prohibits navigators from providing “advice concerning the benefits, terms and features of a particular health plan.” An Ohio law imposes an almost identical rule.
Angoff, who served as the first director of the HHS Office of Consumer Information and Insurance Oversight, said these restrictions will “severely harm consumers.”
“Any state statute that restricts navigators harms the public,” he said.
“Navigators are tremendously important because they do not have an economic interest in directing people to a particular insurance company,” he said. “They can be completely impartial and objective, and they should be able to function as the [federal] law intended.”
Angoff added that the final rules issued by HHS are likely to spur legal fights over restrictions like Missouri’s.
The department’s language failed to specifically pre-empt state laws from hampering navigators, leaving the courts to decide.
HHS is expected to announce its final navigator picks in mid-August. But in the meantime, criticism on Capitol Hill is heating up.
House Republicans held a negative hearing on navigators this spring and several have taken to Fox News to discuss the program’s possible hazards.
GOP senators voiced their disapproval of the $54 million program in a letter to Sebelius last month.
“The standards proposed by [HHS] could result in a convicted felon receiving federal dollars and gaining access to confidential taxpayer information,” the senators wrote.
Diane Boyle, lead federal lobbyist with the National Association of Insurance and Financial Advisors, said it’s unlikely that felons would be admitted to the program.
“We’re not too concerned about that,” Boyle said.
“We’re concerned that navigators will give advice to consumers without the same level of education that an agent would.”
The fight takes place amid other congressional battles over Obama’s signature law.
The House is expected to vote this week on legislation to delay the requirement that individuals purchase health insurance by 2014. That legislation is in response to the administration’s decision to delay the starting date mandating when certain employers must provide health insurance by one year. Separately, the House will vote on legislation to authorize that delay.