Health Insurance Exchanges: HHS Should Enhance Its Management of Open Enrollment Performance
Released: 2018-08-23T00:00:00

Letter

Background

Considerations for Exchange Enrollment and Plan Selection

Qualified health plans sold through the exchanges must meet certain minimum requirements, including those related to benefits coverage. Beyond these requirements, many elements of plans can vary, including their cost and availability. Those who opt to enroll in a plan generally pay for their health care in two ways: (1) a premium to purchase the insurance, and (2) cost-sharing for the particular health services they receive (for example, deductibles, coinsurance, and co-payments).

Metal Tiers

Qualified health plans are offered at one of four metal tiers that reflect the out-of-pocket costs that may be incurred by a consumer. These tiers correspond to the plan’s actuarial value—a measure of the relative generosity of a plan’s benefits that is expressed as a percentage of the covered medical expenses expected to be paid, on average, by the issuer for a standard population and set of allowed charges for in-network providers. In general, as actuarial value increases, consumer cost- sharing decreases. The actuarial values of the metal tiers are: bronze (60 percent), silver (70 percent), gold (80 percent), and platinum (90 percent). If an issuer sells a qualified health plan on an exchange, it must offer at least one plan at the silver level and one plan at the gold level; issuers are not required to offer bronze or platinum plans.

Financial Assistance

Individuals purchasing coverage through the exchanges may be eligible, depending on their incomes, to receive financial assistance to offset the costs of their coverage. According to HHS, more than 80 percent of enrollees obtained financial assistance in the first half of 2017, which came in the form of premium tax credits or cost-sharing reductions.

Premium tax credits. These are designed to reduce an eligible individual’s premium costs, and can either be paid in advance on a monthly basis to an enrollee’s issuer—referred to as advance premium tax credits—or received after filing federal income taxes for the prior year. To be eligible for premium tax credits, enrollees must generally have household incomes of at least 100, but no more than 400, percent of the federal poverty level. The amount of the premium tax credit varies based on enrollees’ income relative to the cost of premiums for their local benchmark plan—which is the second lowest cost silver plan available—but consumers do not need to be enrolled in the benchmark plan in order to be eligible for these tax credits.

Cost-sharing reductions. Enrollees who qualify for premium tax credits, have household incomes between 100 and 250 percent of the federal poverty level, and enroll in a silver tier plan may also be eligible to receive cost-sharing reductions, which lower enrollees’ deductibles, coinsurance, and co-payments.

To reimburse issuers for reduced cost-sharing from qualified enrollees, HHS made payments to issuers (referred to as cost-sharing reduction payments) until October 2017, when it discontinued these payments. Despite HHS’s decision to discontinue cost-sharing reduction payments, issuers are still required under PPACA to offer cost-sharing reductions to eligible enrollees. Since consumers who receive these reductions are generally enrolled in silver plans, insurance commissioners in most states instructed the issuers in their states to increase 2018 premiums for silver plans offered on the exchanges to reflect the discontinued federal payments. This has been referred to as “silver-loading” and resulted in substantial increases in exchange-based silver plan premiums for 2018. (See fig.1.) Because the amount of an eligible enrollee’s premium tax credit is based on the premium for the enrollee’s local benchmark plan (the second lowest cost silver plan available to an enrollee), the value of this form of financial assistance also increased significantly for 2018.

As we have previously reported, the number and type of plans available in the health insurance exchanges varies from year to year. Issuers can add new plans and adjust or discontinue existing plans from year to year, as long as the plans meet certain minimum requirements—such as covering essential health benefits. Issuers can also extend or restrict the locations in which they offer plans. According to HHS, while individuals seeking 2018 coverage were able to select from an average of 25 plans across the various metal tiers, 29 percent of consumers were able to select from plans from only one issuer.

Exchange Outreach

HHS performs outreach to increase awareness of the open enrollment period and facilitate enrollment among healthcare.gov consumers— including those new to the exchanges as well as those returning to renew their coverage. Outreach to these different types of enrollees can vary. For example, while outreach to those new to the exchanges may focus more on the importance of having insurance, outreach to existing enrollees may focus on encouraging them to go back to the exchange to shop for the best option.

Consumer Assistance

All exchanges are required to carry out certain functions to assist consumers with their applications for enrollment and financial assistance, among other things. HHS requires exchanges to operate a website and toll-free call center to address the needs of consumers requesting assistance with enrollment, and to conduct outreach and educational activities to help consumers make informed decisions about their health insurance options. HHS administers the federal healthcare.gov website, which allows consumers in states using the website for enrollment to directly compare health plans based on a variety of factors, such as premiums and provider networks. HHS also operates a Marketplace Call Center to respond to consumer questions about enrollment. Consumers may apply for coverage through the call center, the website, via mail, or in person (in some areas), with assistance from navigator organizations or agents and brokers.

Navigators. PPACA required all exchanges to establish “navigator” programs to conduct public education activities to raise awareness of the availability of coverage available through the exchanges, among other things. As part of HHS’s funding agreement with navigator organizations in states using the federally facilitated exchange, HHS requires them to maintain relationships with consumers who are uninsured or underinsured. They must also examine consumers’ eligibility for other government health programs, such as Medicaid, and provide other assistance to consumers—for example, by helping them understand how to access their coverage.

Agents and Brokers. Licensed by states, agents and brokers may also provide assistance to those seeking to enroll in a health plan sold on the exchanges; however, they are generally paid by issuers. They may sell products for one issuer from which they receive a salary, or from a variety of issuers and be paid a commission for each plan they sell.

Enrollment through Healthcare.gov Was 5 Percent Lower in 2018 than 2017, and Stakeholders Reported That Plan Affordability Likely Played a Major Role in Enrollment

Exchange Enrollment through Healthcare.gov Was 5 Percent Lower in 2018 than 2017

About 8.7 million consumers enrolled in healthcare.gov plans during the open enrollment period for 2018 coverage, 5 percent less than the 9.2 million who enrolled for 2017. This decline continues a trend from 2016, when a peak of 9.6 million consumers enrolled in such plans. Since that peak, enrollment has decreased by 9 percent. Enrollment in plans sold by state-based exchanges that use their own enrollment website has remained relatively stable during the same time period, with just over 3.0 million enrollees each year since 2016. Overall, enrollment in federal and state exchanges has declined 7 percent from a peak of nearly 12.7 million enrollees in 2016, largely driven by the decrease in enrollment in exchanges using healthcare.gov. (See table 1.) HHS officials told us that they did not want to speculate on the specific factors that affected enrollment this year, but noted that the exchanges are designed for consumers to utilize as needed, which includes degrees of fluctuation from year to year. A decreased demand for exchange-based insurance could be influenced by increases in the numbers of people with other types of health coverage, such as coverage through other public programs, or that which is sponsored by their employers.

Enrollees who were new to healthcare.gov coverage comprised a smaller proportion of total enrollees in 2018 than in 2017, continuing a trend seen in prior years. The proportion of new enrollees decreased from 33 percent (3 million) in 2017 to 28 percent (2.5 million) in 2018 (see fig. 2). Some stakeholders noted the importance of enrolling new, healthy enrollees each year to maintain the long-term viability of the exchanges. However, other stakeholders noted that they had expected the number and proportion of new enrollees to decrease over time because a large majority of those who wanted coverage and were eligible for financial assistance had likely already enrolled. The increasing proportion of enrollees who return to the exchanges for their coverage could also demonstrate their need for or satisfaction with this coverage option.

The demographic characteristics of enrollees remained largely constant from 2017 through 2018. For example, the proportion of enrollees with household incomes of 100 to 250 percent of the federal poverty level remained similar at 71 percent in 2017 and 70 percent in 2018. In addition, the proportion of enrollees whose households were located in rural areas was 18 percent in both years. However, the proportion of healthcare.gov enrollees aged 55 and older increased from 27 percent in 2017 to 29 percent in 2018. Appendix III provides detailed information on the characteristics of enrollees in 2017 and 2018.

Stakeholders Reported That Plan Affordability Likely Played a Major Role in 2018 Exchange Enrollment and Plan Selection

According to stakeholders we interviewed, plan affordability likely played a major role in 2018 exchange enrollment—both attracting and detracting from enrollment—and enrollees’ plan selection. In 2018, premiums across all healthcare.gov plans increased an average of 30 percent—more than expected given overall health cost trends. As a result of these premium increases, plans were less affordable in 2018 compared to 2017 for exchange consumers without advance premium tax credits (15 percent in 2018). One driver of these premium increases was the elimination of federal cost-sharing reduction payments to issuers in late 2017, which resulted in larger premium increases for silver tier plans (the most popular healthcare.gov metal tier). For example, among enrollees who did not use advance premium tax credits, the average monthly premium amount paid for silver plans increased 45 percent (from $424 in 2017 to $614 in 2018). Average premiums for these enrollees also increased for bronze and gold plans, but not by as much—22 percent for bronze plans (from $374 in 2017 to $455 in 2018) and 23 percent for gold plans (from $509 in 2017 to $628 in 2018). Most stakeholders we interviewed told us the decreased affordability of plans likely resulted in lower enrollment in exchange plans for these consumers. Some stakeholders we interviewed reported personally encouraging consumers who were not eligible for premium tax credits to purchase their coverage off of the exchanges, where they could often purchase the same health insurance plan for a lower price.

However, despite overall premium increases, plans became more affordable for the more than 85 percent of exchange consumers who used advance premium tax credits, because the value of the premium tax credits increased significantly in order to compensate for the higher premiums of silver plans. For example, the average value of monthly advance premium tax credits for those enrolled in any exchange plan increased 44 percent, from $383 in 2017 to $550 in 2018—the largest increase in the program’s history. As a result, enrollees who used advance premium tax credits faced lower net monthly premiums on average in 2018 than they had in 2017—specifically, enrollees’ average net monthly premiums across all plans decreased 16 percent from $106 in 2017 to $89 in 2018. According to most stakeholders we interviewed, the enhanced affordability of net monthly premiums among consumers who used advance premium tax credits likely encouraged enrollment among this group. (See fig. 3).

Stakeholders we interviewed also noted that plan affordability likely played a major role in enrollees’ plan selection, including the metal tier of their coverage. This finding is consistent with our prior work which showed that plan cost—including premiums—is a driving factor in exchange enrollees’ selection of a plan. Specifically, we found that while silver plans remained the most popular healthcare.gov metal tier, covering 65 percent of all enrollees in 2018, this proportion decreased 9 percentage points from 2017 as more enrollees selected bronze and gold plans. (See fig. 4.)

Stakeholders reported that consumers using advance premium tax credits benefitted from enhanced purchasing power in 2018 due to the impact of silver loading, which likely served as a driving factor in these consumers’ plan selections. Specifically, they noted that the increased availability of free bronze and low-cost gold plans (after tax credits were applied) for such consumers likely explained why many enrollees moved from silver to bronze or gold plans for 2018. While average monthly net premiums paid by these consumers decreased overall from 2017 to 2018 due to the tax credits, the changes were most pronounced for those enrolled in bronze or gold plans (which decreased 36 and 39 percent, respectively), compared to silver plans (which decreased 13 percent). Separately, the enhanced affordability of gold plans, along with the richer benefits they offer, likely led some consumers to move from silver to gold plans in 2018. While the average monthly net premium amount paid for gold plans in 2018 ($207) remained higher than that for less generous silver plans ($88) among those using advance premium tax credits, it was nearly 40 percent lower than the average net premium for gold plans in 2017 ($340). Stakeholders also reported that consumers in some areas were able to access gold plans for a lower cost than silver plans. The proportion of enrollees in gold plans using advance premium tax credits increased from 49 percent to 74 percent—signaling that many enrollees used their higher tax credits to enroll in richer gold plan coverage.

As the proportion of enrollees with silver plans declined for 2018, so too did the proportion of enrollees with cost-sharing reductions—which are generally only available to those with silver plans. Specifically, 54 percent of healthcare.gov enrollees received these subsidies in 2018, 6 percentage points lower than the 60 percent who received these subsidies in 2017.

Stakeholders Reported That a Variety of Other Factors Likely Affected 2018 Enrollment

Stakeholders we interviewed reported that a variety of factors other than plan affordability also likely affected 2018 exchange enrollment, but opinions on the impact of each factor were mixed. Specifically, most stakeholders we interviewed, including all 4 navigator organizations and 3 professional trade organizations, reported that consumer confusion about PPACA and its status likely played a major role in detracting from 2018 healthcare.gov enrollment. Some of these stakeholders attributed consumers’ confusion about the exchanges to efforts to repeal and replace PPACA. In addition, many stakeholders attributed consumer confusion to the Administration’s negative statements about PPACA. Further, many stakeholders reported that as a result of the public debate during 2017 over whether to repeal and replace PPACA many consumers had questions about whether the law had been repealed and whether insurance coverage was still available through the exchanges. However, other stakeholders reported that this debate likely did not affect enrollment and consumers who were in need of exchange-based coverage were likely able to find the information they required to enroll. In addition, many stakeholders noted that consumer understanding and enrollment was aided through increased outreach and education events conducted by many groups, including some state and local governments, hospitals, issuers, and community groups. Many stakeholders also noted that the volume of exchange-related news increased significantly before and during the open enrollment period for 2018 coverage, in part due to the ongoing political debate about the future of the exchanges. These stakeholders agreed that this increase in reporting about the exchanges likely resulted in increased consumer awareness and enrollment, even in cases where the coverage negatively portrayed the exchanges.

Many stakeholders also said that reductions in HHS outreach and advertising of the open enrollment period likely detracted from 2018 enrollment, in part because any reduction in promoting enrollment detracts from overall consumer awareness and understanding of the program and its open enrollment period. In particular, some stakeholders reported that outreach and advertising are especially important for increasing new enrollment, especially among younger and healthier consumers whose enrollment can help ensure the long-term stability of the exchanges. However, other stakeholders reported that these reductions likely had no effect on enrollment, noting that most consumers who needed exchange-based coverage were already enrolled in it and were well aware of the program, and also noting that enrollment in 2018 did not dramatically change compared with that of 2017.

Stakeholders we interviewed were largely divided on the effects of other factors on 2018 healthcare.gov enrollment, including the shorter 6-week open enrollment period. For example, about half of the stakeholders said that the shorter open enrollment period likely led fewer to enroll due to lack of consumer awareness of the new deadline, as well as to challenges related to the reduced capacity of those helping consumers to enroll. However, many others said that the shorter open enrollment period likely had no effect. In particular, some of these stakeholders noted that enrollment in 2018 was similar to that for 2017 and that during prior open enrollment periods the majority of consumers had enrolled by December 15, as this was the deadline for coverage that began in January. Figure 5 displays the range of stakeholder views on factors affecting 2018 healthcare.gov enrollment, and appendix IV provides selected stakeholder views of factors affecting 2018 healthcare.gov enrollment.

HHS Reduced Consumer Outreach for 2018 and Used Problematic Data to Allocate Navigator Funding

HHS reduced its consumer outreach—including paid advertising and navigator funding—for the 2018 open enrollment period. Further, HHS allocated the navigator funding using a narrower approach and problematic data, including consumer application data that it acknowledged were unreliable and navigator organization-reported goal data that were based on an unclear description of the goal, and which HHS and navigator organizations likely interpreted differently.

HHS Reduced Paid Advertising

HHS reduced the amount it spent on paid advertising for the 2018 open enrollment period by 90 percent, spending $10 million as compared to the $100 million it spent for the 2017 open enrollment period. HHS officials reported that their 2018 advertising approach was a success, noting that they cut wasteful spending on advertising, which resulted in a more cost- effective approach. HHS officials told us that the agency elected to reduce funding for paid advertising to better align with its spending on paid advertising for the Medicare open enrollment period. According to the officials, HHS targeted its reduced funding toward low-cost forms of paid advertising that HHS studies showed were effective in driving enrollment, and that could be targeted to specific populations, such as individuals aged 18 to 34 and individuals who had previously visited healthcare.gov. For example, for 2018, HHS spent about 40 percent of its paid advertising budget on two forms of advertising aimed at reaching these populations.

Specifically, HHS spent $1.2 million on the creation of two digital advertising videos that were targeted to potential young enrollees, and $2.7 million on search advertising, in which Internet search engines displayed a link to healthcare.gov when individuals used relevant search terms. HHS followed up with individuals that visited the link to encourage them to enroll. Agency officials said they focused some of their paid advertising on individuals aged 18 to 34 because in the prior open enrollment period many individuals in this age range enrolled after December 15—the deadline for the 2018 open enrollment period. HHS officials said they did not use paid television advertising because it was too expensive and because it was not optimal for attracting young enrollees—although a 2017 HHS study found this was one of the most effective forms of paid advertising for enrolling new and returning individuals during the prior open enrollment period. See appendix V for HHS’s expenditures for paid advertising for the 2017 and 2018 open enrollment periods.

HHS Reduced Navigator Funding and Used a Narrower Approach and Problematic Data to Allocate It

HHS reduced navigator funding by 42 percent for 2018, spending $37 million compared to the $63 million it spent for 2017. According to HHS officials, the agency reduced this funding due to a shift in the Administration’s priorities. For the 2018 open enrollment period, HHS planned to rely more heavily on agents and brokers—another source of in-person consumer assistance, who, unlike navigator organizations that are funded through federal grants, are generally paid for by the issuers they represent. HHS took steps to highlight their availability to help consumers and enable consumers to enroll through them. For example, for the 2018 open enrollment period, HHS made a new “Help on Demand” tool available on healthcare.gov that connected consumers directly to local agents or brokers. HHS also developed a streamlined enrollment process for those enrolling through agents and brokers.

HHS also changed its approach for allocating the navigator funding to focus on a narrower measure of navigator organization performance than it had used in the past. According to HHS officials, in prior years, HHS awarded funding based on navigator organizations’ performance on a variety of tasks, such as the extent to which navigator organizations met their self-imposed goals for numbers of public outreach events and individuals assisted with applications for exchange coverage and selection of exchange plans. HHS officials said the agency previously also took state-specific factors, such as the number of uninsured individuals in a state, into account when awarding funding. HHS calculated preliminary navigator funding awards for 2018 using this approach. However, according to HHS officials, the agency later decided to change both its budget and approach for allocating navigator funding for 2018 to hold navigator organizations more accountable for the number of individuals they enrolled in exchange plans. In its new funding allocation approach, rather than taking into account navigator organization performance on a variety of tasks, HHS only considered performance in achieving one goal—the number of individuals each navigator organization planned to assist with selecting or enrolling in exchange plans for 2017 coverage. In implementing this new approach, HHS compared the number of enrollees whose 2017 exchange coverage applications included navigator identification numbers with each navigator organization’s self-imposed goal. For navigator organizations that did not appear to meet their goals, HHS decreased their preliminary 2018 award amounts proportionately. For navigator organizations that appeared to meet or exceed their goals, HHS left their preliminary 2018 award amounts unchanged. Based on this change in approach, HHS offered 81 of its 98 navigator organizations less funding for 2018, with decreases ranging from less than 1 percent to 98 percent of 2017 funding levels. HHS offered 4 of the 98 navigator organizations increased funding and 13 the same level of funding they received for 2017 (see fig. 6).

We found that the data HHS used for its revised funding approach were problematic for multiple reasons. In particular, prior to using the 2017 consumer application data as part of its 2018 funding calculations, HHS had acknowledged that these data were unreliable, in part because navigators were not consistently entering their identification numbers into applications during the 2017 open enrollment period. Specifically, HHS stated in a December 9, 2016, email to navigator organizations that the application data were unreliable and thus could not be used. Over 4 million individuals had enrolled in 2017 coverage by December 10, 2016, so it is likely that many of the applications that HHS used in its 2018 funding calculation included incomplete or inaccurate information with respect to navigator assistance. HHS provided guidance to navigator organizations in the December 2016 email on the importance of, and locations for, entering identification numbers into applications to help improve the reliability of the data. However, some data reliability issues may have remained throughout the 2018 open enrollment period, as two of the navigator organizations we interviewed reported ongoing challenges entering navigator identification numbers into applications during this period. For example, representatives from one navigator organization reported that the application field where navigators enter their identification number was at times pre-populated with an agent or broker’s identification number. Consumer application data may therefore still be unreliable for use in HHS navigator funding decisions that would be expected later this year for 2019.

Moreover, the 2017 goal data that HHS used in its funding calculation were also problematic because HHS described the goal in an unclear manner when it asked navigator organizations to set their goals. As a result, HHS’s interpretation of the goal was likely different than how it was interpreted and established by navigator organizations. Specifically, in its award application instructions, HHS asked navigator organizations to provide a goal for the number of individuals that they “expected to be assisted with selecting/enrolling in (including re- enrollments)” but HHS did not provide guidance to navigator organizations on how it would interpret the goal. HHS officials told us that they wanted to allow navigator organizations full discretion in setting their goals, since the organizations know their communities best. In its funding calculation, HHS interpreted this goal as the number of individuals navigator organizations planned to enroll in exchange plans. However, as written in the award application instructions, the goal could be interpreted more broadly, because not all individuals whom navigators assist with the selection of exchange plans ultimately apply and enroll in coverage. Representatives from one navigator organization we spoke with said they did interpret this goal more broadly than how it was ultimately interpreted by HHS—and thus set it as the number of consumers they planned to assist in a variety of ways, not limiting it to those they expected to assist through to the final step of enrollment in coverage. The navigator organization therefore set a higher goal than it otherwise would have, had it understood HHS’s interpretation of the goal, and ultimately received a decrease in funding for 2018.

As a result, we found that two of the three inputs in HHS’s calculation of 2018 navigator organization awards were problematic (see fig. 7).

HHS’s reduced funding and revised funding allocation approach resulted in a range of implications for navigator organizations. According to HHS officials, eight of the navigator organizations that were offered reduced funding for 2018—with reductions ranging from 50 to 98 percent of 2017 funding levels—declined their awards and withdrew from the program. HHS reported asking the remaining navigator organizations to focus on re-enrolling consumers who had coverage in 2017 and resided in areas where issuers reduced or eliminated plan offerings for 2018, and informing consumers about the shortened open enrollment period for 2018 coverage. Representatives of the navigator community group we interviewed reported that many navigator organizations did focus their resources on enrollment and cut back on outreach efforts, particularly in rural areas. According to self-reported navigator organization data provided by HHS, navigator organizations collectively reported conducting 68 percent fewer outreach events during the 2018 open enrollment period as compared to the 2017 period. Representatives from the navigator organizations we interviewed also reported making changes to their operations; for example, officials from one of the navigator organizations reported cutting staff and rural office locations. Officials from another navigator organization said that they focused their efforts on contacting prior exchange enrollees to assist them with re-enrollment, instead of finding and enrolling new consumers, and de-prioritized assistance with Medicaid enrollment. The three navigator organizations we spoke with that had funding cuts for 2018 also reported that their ability to perform the full range of navigator duties during the rest of the year would be compromised because they needed to make additional cuts in their operations—such as reducing staff and providing less targeted assistance to underserved populations—in order to reduce total costs. One of the three navigator organizations reported that it may go out of business at the end of the 2018 award year.

HHS’s narrower approach to awarding funding; lack of reliable, complete data on the extent to which navigator organizations enrolled individuals in exchange plans; and lack of clear guidance to navigator organizations on how to set their goals could hamper the agency’s ability to use the program to meet its objectives. Federal internal control standards state that management should use quality information to achieve the agency’s objectives, such as by using relevant, reliable data for decision-making. Without reliable performance data and accurate goals, HHS will be unable to measure the effectiveness of the navigator program and take informed action as necessary. Further, because HHS calculated awards using problematic data, navigator organizations may have received awards that did not accurately reflect their performance in enrolling individuals in exchange plans. Additionally, HHS’s narrow focus on exchange enrollment limited its ability to make decisions based on relevant information. Moving forward, this may affect navigator organizations’ interests and abilities in providing a full range of services to their communities, including underserved populations. This, in turn, could affect HHS’s ability to meet its objectives, such as its objective of improving Americans’ access to health care.

HHS Did Not Set Numeric Enrollment Targets for 2018, and Instead Focused on Enhancing Certain Aspects of Consumers’ Experiences

HHS did not set any numeric enrollment targets for 2018 related to total healthcare.gov enrollment, as it had in prior years. In prior years, HHS used numeric targets to monitor enrollment progress during the open enrollment period and focus its resources on those consumers that it believed had a high potential to enroll in exchange coverage. For example, HHS established a target of enrolling a total of 13.8 million individuals during the 2017 open enrollment period and also set numeric enrollment targets for 15 regional markets that the agency identified as presenting strong opportunities for meaningful enrollment increases, partly due to having a high percentage of eligible uninsured individuals. HHS used these regional target markets to focus its outreach, travel, and collaborations with local partners. According to agency officials, during prior open enrollment periods, HHS monitored its performance with respect to its targets and revised its outreach efforts in order to better meet its goals.

According to federal internal control standards, agencies should design control activities to achieve their objectives, such as by establishing and monitoring performance measures. HHS has recognized the importance of these internal controls by requiring state-based exchanges to develop performance measures and report on their progress. Without developing numeric targets for healthcare.gov enrollment, HHS’s ability to both perform high level assessments of its performance and progress and to make critical decisions about how to use its resources is hampered. HHS may also be unable to ensure that it meets its objectives—including its current objective of improving Americans’ access to health care, including by stabilizing the market and implementing policies that increase the mix of younger and healthier consumers purchasing plans through the individual market.

HHS leadership decided against setting numeric enrollment targets for the 2018 open enrollment period and instead focused on a goal of enhancing the consumer experience, according to HHS officials. Specifically, HHS officials measured the consumer experience based on its assessment of healthcare.gov availability and functionality, and call center availability and customer satisfaction. HHS officials told us that they selected these measures of the consumer experience because healthcare.gov and the call center represent two of the largest channels through which consumers interact with the exchange. HHS reported meeting its goal based on consumers’ improved experiences with these two channels, some of which had been problematic in the past. (See fig. 8.)

Healthcare.gov. According to HHS officials, the healthcare.gov website achieved enhanced availability and functionality for the 2018 open enrollment period, continuing a trend in improvements over prior years. While HHS scheduled similar periods of healthcare.gov downtime for maintenance in 2017 and 2018, the website had less total downtime during the 2018 open enrollment period because the agency needed to conduct less maintenance. HHS officials attributed the increased availability in part to an operating system upgrade and comprehensive testing of the website that they conducted before the 2018 open enrollment period began. In addition, unlike prior years, HHS officials said that the agency published scheduled maintenance information for 2018 to reduce scheduling conflicts for consumers and groups providing enrollment assistance. HHS also reported enhancing the functionality of the website for the 2018 open enrollment period, including by adding new tools, such as a “help on demand” feature that links consumers with a local agent or broker willing to assist them, as well as updated content that included more plain language. Many stakeholders we interviewed told us that healthcare.gov functioned well during the open enrollment period and was more available than it had been in prior years.

Call Center Assistance. According to HHS officials, the call center reduced wait times and improved customer satisfaction scores in 2018, continuing a trend in improvements over prior years. HHS officials reported average wait times of 5 minutes, 38 seconds for the 2018 open enrollment period—almost four minutes shorter than the average wait time experienced during a comparable timeframe of the 2017 open enrollment period. HHS officials attributed this reduction in wait times to improvements in efficiency, including scripts that used fewer words and generated fewer follow-up questions. In addition, there was a modest reduction in call center volume during similar timeframes of the 2017 and 2018 open enrollment periods. Officials from many stakeholders we interviewed reported that call center assistance was more readily available this year than it had been in prior years. HHS officials also reported an average call center customer satisfaction score of 90 percent in 2018 compared to 85 percent in 2017, based on surveys conducted at the end of customer calls.

Although HHS officials reported that the agency met its goal of enhancing specific aspects of the consumer experience for the 2018 open enrollment period, HHS narrowly defined its goal and excluded certain aspects of the consumer experience that it had identified as key as recently as 2017. More specifically, in 2017, HHS reported that successful outreach and education events and the availability of in-person consumer assistance, such as that provided by navigators to help consumers understand plan options, were key aspects of the consumer experience. However, HHS did not include these key items when measuring progress toward their 2018 goal of enhancing the consumer experience. Federal internal control standards state that agencies should identify risks that affect their defined objectives and use quality information to achieve these objectives, including by identifying the information required to achieve the objectives and address related risks. By excluding key aspects of the consumer experience in its evaluation of its performance, HHS’s assessment of the consumer experience may be incomplete. For example, as noted above, some stakeholders we interviewed told us that consumer confusion likely detracted from enrollment for 2018, and some linked this outcome to HHS’s reduced role in promoting exchange enrollment, including navigator support, which may have resulted in less in-person consumer assistance through navigators. HHS’s assessment of the consumer experience, which focused only on consumers who used the website or reached out to the call center during open enrollment, did not account for the experiences of those who interacted with the health insurance exchanges through other channels, such as through navigators or agents and brokers.

Conclusions

Some experts have raised questions about the long-term stability of the exchanges absent sufficient enrollment, including among young and healthy consumers. To encourage exchange enrollment, HHS has traditionally conducted a broad outreach and education campaign, including funding navigator organizations that provide in-person enrollment assistance. For the 2018 open enrollment period, HHS reduced its support of navigator organizations and changed its approach for allocating navigator funding to focus on exchange enrollment alone. HHS allocated the funding based on performance data that were problematic for multiple reasons, including because some of the underlying data were unreliable. As a result, navigator organizations received funding that reflected a more limited evaluation of their performance than HHS had used in the past, and that may not have accurately reflected their performance. This raises the risk that navigator organizations will decrease the priority they place on fulfilling a range of other duties for which they are responsible, including providing assistance to traditionally underserved populations, which some navigator organizations we interviewed reported they had either decreased or planned to decrease due to reduced funding. HHS’s lack of complete and reliable data on navigator organization performance hampers the agency’s ability to make appropriately informed decisions about funding. Moreover, its focus on enrollment alone in awarding funding may affect navigator organizations’ ability to fulfill the full range of their responsibilities, which could in turn affect HHS’s ability to use the program as a way to meet its objective of enhancing Americans’ access to health care.

In addition, the lack of numeric enrollment targets for HHS to evaluate its performance with respect to the open enrollment period hampers the agency’s ability to make informed decisions about its resources. HHS reported achieving a successful consumer experience for the 2018 open enrollment period based on enhancing its performance in areas that had been problematic in the past. However, the agency’s evaluation of its performance did not include aspects of the consumer experience that it identified in 2017 as key, and for which stakeholders reported problems in 2018. As a result, its assessment of its performance in enhancing the consumer experience was likely incomplete. Absent a more complete assessment, HHS may not have the information it needs to fully understand the consumer experience.

Recommendations for Executive Action

We are making the following three recommendations to HHS:

The Secretary of HHS should ensure that the approach and data it uses for determining navigator award amounts accurately and appropriately reflect navigator organization performance, for example, by 1. providing clear guidance to navigator organizations on performance goals and other information they must report to HHS that will affect their future awards, 2. ensuring that the fields used to capture the information are functioning properly, and 3. assessing the effect of its current approach to funding navigator organizations to ensure that it is consistent with the agency’s objectives. (Recommendation 1)

The Secretary of HHS should establish numeric enrollment targets for healthcare.gov, to ensure it can monitor its performance with respect to its objectives. (Recommendation 2)

Should the agency continue to focus on enhancing the consumer experience as a goal for the program, the Secretary of HHS should assess other aspects of the consumer experience, such as those it previously identified as key, to ensure it has quality information to achieve its goal. (Recommendation 3)

Agency Comments and Our Evaluation

We provided a draft of this report to HHS for comment. In its comments, reproduced in appendix VI, HHS concurred with two of our three recommendations. HHS also provided technical comments, which we incorporated as appropriate.

HHS concurred with our recommendation that it ensure that the approach and data it uses for determining navigator awards accurately and appropriately reflect navigator organization performance. In its comments on our draft report, HHS stated that it had notified navigator organizations that their funding would be linked to the organizations’ self-identified performance goals and their ability to meet those goals. On July 10, 2018, HHS issued its 2019 funding opportunity announcement for the navigator program, which required those applying for the award to set performance goals, including for the number of consumers assisted with enrollment and re-enrollment in exchange plans, and also states that failure to meet such goals may negatively impact a recipient’s application for future funding. In its comments, HHS also noted that it is in the process of updating the healthcare.gov website so that individual applications can hold the identification numbers of multiple entities, such as navigators, agents or brokers, and will work to ensure that the awards align with agency objectives.

HHS also concurred with our recommendation that the agency assess other aspects of the consumer experience, such as those it previously identified as key, to ensure it has quality information to achieve its goal. HHS noted that it had assessed the consumer experience based on the availability of the two largest channels supporting exchange operations, and also noted that it will consider focusing on other aspects of the consumer experience as needed.

HHS did not concur with our recommendation that the agency establish numeric enrollment targets for healthcare.gov, to ensure that it can monitor its performance with respect to its objectives. Specifically, HHS noted that there are numerous external factors that can affect a consumer’s decision to enroll in exchange coverage that are outside of the control of HHS, including the state of the economy and employment rates. HHS stated that it does not believe that enrollment targets are relevant to assess the performance of a successful open enrollment period related to the consumer experience. Instead, it believes a more informative performance metric would be to measure whether everyone who utilized healthcare.gov, who qualified for coverage, and who desired to purchase coverage, was able to make a plan selection.

We continue to believe that the development of numeric enrollment targets is important for effective monitoring of the program and management of its resources. Without establishing numeric enrollment targets for upcoming open enrollment periods, HHS’s ability to evaluate its performance and make informed decisions about how it should deploy its resources is limited. We also believe that these targets could help the agency meet its program objectives of stabilizing the market and of increasing the mix of younger and healthier consumers purchasing plans through the individual market. Furthermore, HHS has previously demonstrated the ability to develop meaningful enrollment targets using available data. For example, in prior years, HHS developed numeric enrollment targets based on a range of factors, including the number of exchange enrollees, number of uninsured individuals, and changes in access to employer-sponsored insurance, Medicaid, and other public sources of coverage. In addition, the agency set numeric enrollment targets for regional markets that took these and other factors into account. Once these targets were established, HHS officials were able to use them to monitor progress throughout the open enrollment period and revise its efforts as needed.

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If you or your staffs have any questions about this report, please contact me at (202) 512-7114 or dickenj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix VII.

Appendix I: GAO List of Factors That May Have Affected 2018 Healthcare.gov Enrollment

We identified a list of factors that may have affected 2018 healthcare.gov enrollment based on a review of Department of Health and Human Services information, interviews with health policy experts, and review of recent publications by these experts related to 2018 exchange enrollment.

Factors related to the open enrollment period:

Open enrollment conducted during a shorter 6-week open enrollment period.

Consumer awareness of this year’s open enrollment deadline.

Factors related to plan availability and plan choice:

Plan affordability for consumers ineligible for financial assistance.

Plan affordability for consumers eligible for financial assistance.

Consumers’ perceptions of plan affordability.

Availability of exchange-based plan choices.

Availability of off-exchange plan choices.

Consumer reaction to plan choices.

Factors related to outreach and education:

Reductions in federal funding allocated to outreach and education, and lack of television and other types of advertising.

Top Administration and agency officials’ messaging about the health insurance exchanges and open enrollment.

National and local media reporting on the exchanges and open enrollment.

Local outreach and education events conducted by federally funded navigator organizations.

Outreach and education efforts and/or advertising by some states, issuers, advocacy groups, community organizations, and agents and brokers.

Factors related to enrollment assistance and tools:

Availability of one-on-one enrollment assistance from federally funded navigator organizations.

Availability of one-on-one enrollment assistance from agents and brokers.

Updates to the content and function of the healthcare.gov website.

Availability of the healthcare.gov website during the open enrollment period.

Availability of assistance through the call center during the open enrollment period.

Consumer understanding of the Patient Protection and Affordable Care Act and its status.

Automatic re-enrollment occurred on the last day of the open enrollment period.

Appendix II: Information about Stakeholders Interviewed

Number of organizations interviewed

4 Navigator organizations were selected to reflect a range in: (1) amount of 2018 award from the Department of Health and Human Services (HHS); (2) change in HHS award amount from 2017; (3) region; and (4) target population.

Insurance departments in six states that use the federally facilitated exchanges were selected to reflect a range with respect to: (1) 2018 healthcare.gov enrollment outcomes; (2) strategies used for calculating 2018 premiums to compensate for the loss of federal cost-sharing reduction payments; (3) changes in 2018 navigator organization award amounts; and (4) the number of issuers offering 2018 exchange coverage in the state. 3 Three issuers were selected who offered 2018 plans on healthcare.gov exchanges; two of which sold exchange plans in multiple states. 5 Five research and consumer advocacy organizations were selected to provide a range of perspectives with respect to the law and issues related to exchange outreach and enrollment. 3 Three professional trade associations were selected to collectively represent the perspectives of regulators, issuers, and consumer assisters. 2 Two state-based exchanges were selected based on the length of their open enrollment periods—one had one of the shortest open enrollment periods and the other had one of the longest open enrollment periods for 2018.

Navigator organizations, among other things, carry out public education activities and help consumers enroll in a health insurance plan offered through the exchange. HHS awards financial assistance to navigator organizations that provide these services in states using the federally facilitated exchange. An issuer is an insurance company, insurance service, or insurance organization that is required to be licensed to engage in the business of insurance in a state. State-based exchanges are able to set their own budget and strategy for promoting exchange enrollment and set the length of their open enrollment periods.

Metal tier of selected plan Bronze

Household income

Appendix IV: Selected Stakeholder Views of Factors Likely Affecting 2018 Enrollment in Healthcare.gov Plans

We identified a list of factors that may have affected 2018 healthcare.gov enrollment based on a review of Department of Health and Human Services (HHS) information, interviews with health policy experts, and review of recent publications by these experts related to 2018 exchange enrollment. Using this list, we conducted structured interviews with officials from 23 stakeholder organizations to gather their viewpoints as to whether and how these or other factors affected 2018 health insurance exchange enrollment. Organizations interviewed were selected to reflect a wide range of perspectives and included HHS-funded navigator organizations that provide in-person consumer enrollment assistance, issuers, state insurance departments, professional trade organizations, research and advocacy organizations, and state-based exchanges. Table 2 displays a range in stakeholder views about the impact of these factors.

Appendix V: HHS Paid Advertising Expenditures for 2017 and 2018 Open Enrollment Periods

Appendix VI: Comments from the Department of Health and Human Services

Appendix VII: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Gerardine Brennan, Assistant Director; Patricia Roy, Analyst-in-Charge; Priyanka Sethi Bansal; Giao N. Nguyen; and Fatima Sharif made key contributions to this report. Also contributing were Muriel Brown, Laurie Pachter, and Emily Wilson.