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Trump is slashing Obamacare’s advertising budget by 90%

The White House will also cut the in-person outreach program by $23 million.

President Trump Speaks On Tax Reform In Springfield, Missouri Photo by Michael B. Thomas/Getty Images

The Trump administration plans to deeply cut Obamacare outreach and advertising, officials announced Thursday. They will reduce Obamacare advertising spending 90 percent, from the $100 million that the Obama administration spent last year to $10 million this year, and cut the budget for the in-person enrollment program by 41 percent.

Taken together, this represents a 72 percent cut to efforts to enroll eligible Americans into health law programs.

Administration officials cited “diminishing returns” from outreach activities. In a phone call with reporters, they said that most Americans already know about the Affordable Care Act. They plan to make the deepest cuts to the enrollment workers who have signed up few health law enrollees.

Obamacare advocates, however, worry that these type of budget cuts will be devastating to the law, making it difficult for potential enrollees to learn about the benefits.

"The surest way to kill the exchanges is to keep them a secret," says Timothy Jost, a consumer advocate at the National Association of Insurance Commissioners. "Sick people will find them, but getting younger and healthier people enrolled is the problem."

Trump administration will cut advertising from $100 million to $10 million

There are two main ways the federal government has typically handled Obamacare outreach: with advertisements and in-person assistance. The Trump administration will significantly scale back both of these activities, spending millions less on each program.

The Affordable Care Act’s advertising budget has paid for digital messaging, television ads and radio spots. Officials at Health and Human Services estimated that the Obama administration spent $100 million on advertising last year.

This year, the Trump administration will spend $10 million on advertising nationwide. To put that number in context, California is planning to spend $111.5 million on health law advertising in its state alone.

Health and Human Services officialssaid they thought the ads weren’t working as well in the health law’s fourth year.

“People are aware of Obamacare and the exchanges, they are aware they can sign up,” the second HHS official said. (A spokesperson requested that reporters refer to the officials as Health and Human Service Official 1, 2, and 3. When asked why their names could not be used, the spokesperson said “It’s just for briefing purposes.”) “The Obama administration doubled spending on advertising and saw a 5 percent decline in enrollment. Despite a doubled budget, there are diminishing returns.”

The decline in health law enrollment, however, occurred in late January, around the moment the Trump administration abruptly cancelled $5 million in advertisements after taking office.

When pressed by a reporter, officials said they had not done any studies of the efficacy of enrollment advertising or whether public awareness is indeed quite high.

“We haven’t done a specific study related to the public awareness of the program,” the third HHS official said. “I think most Americans are aware of the program at this point in time.”

There is not a large body of research on Affordable Care Act advertising, but what has been done correlates more advertising with higher sign-up rates. A 2017 study published in the journal Health Affairs shows that “counties exposed to higher volumes of local insurance advertisements during the first open enrollment period experienced larger reductions in their uninsurance rates than other counties.”

Consumer advocates, meanwhile, argue that this is the exact moment when advertising is needed, given all the uncertainty over the health law’s future the recent Congressional debate has created.

“This is actually a time when we need more assistance because of the confusion around what the future of the ACA is, whether the mandate is being enforced, what plan options are,” says Elizabeth Hagan, associate director of coverage initiatives at Families USA.

In-person assistance will receive a $23 million budget cut

The Obama administration spent $62.5 million in 2016 providing grants to non-profits and health clinics to help Americans sign up for health coverage. This “navigator” program paid enrollment workers to assist with enrollment, and advertise the open enrollment period to their community (through things like phone calls and health fairs).

The Trump administration will reduce the navigator program’s budget to $36 million. It will focus its budget cuts on the navigator grantees that have fallen short of their enrollment goals. A navigator grantee, for example, who only hit 30 percent of its enrollment goal this year will get just 30 percent of its expected budget for next year (no grantees will be defunded entirely — the first HHS official said they’d set a floor of $10,000 for all participants).

Groups that outperformed their enrollment goal — who enrolled 110 percent of expected enrollees, for example — will not get a bonus for their work.

“No, that is not part of the methodology,” the second HHS official told reporters.

The HHS officials argued that the navigator program has been ineffective. Despite its multimillion-dollar budget, they estimate it has only signed up 81,426 Obamacare enrollees. The first HHS official cited the case of one Obamacare navigator group that received a $200,000 grant but only signed one person up.

Hagan argued that the navigators have an important function beyond the in-person sign-ups. They attend health fairs, hand out flyers in the community, and make phone calls to enrollees reminding them to re-enroll. Those activities may be missed by the Trump administration’s methodology, which relies on a navigator’s ID number being entered onto the application (which might not happen in a case where an enrollees seeks in-person advice, for example, but finished the sign-up process at home).

“They may be helping one consumer with an application but they’re letting their families know, and letting their friends know,” Hagan says.

These changes come amid other Trump administration decisions that could lower health law enrollment. HHS announced this spring that it would cut the open enrollment period in half, from 90 days this year to 45 days next year. Consumer advocates expect these changes will depress enrollment significantly.

“The need for in person assistance is more profound now than the first open enrollment period,” Hagan says.