Funding for Federal ACA Health Navigators To Be Cut
- jobehorsley
- Feb 20
- 1 min read
How Much Will Be Cut
The Center of Medicare and Medicaid announced that they are going to lower the funding for Affordable Care Act Navigator program from $98 million in 2024 to only $10 million.
Why Are They Reducing Funding
The purpose of cutting the funding is to reduce the premium costs for health insurance on the exchange.
How does this help reduce the premium cost? For insurance companies to sell health insurance on the federal marketplace exchange they have to pay a user fee. The user fee for plan year 2024 was 2.2 %. This is a percentage of the premiums that were received by insurers who sold plans through the marketplace.
The insurance companies could add the fee into the pricing structure of the premiums, which may cause higher premiums on the marketplace. By cutting the Navigator budget in theory will lower the user fees, because they won't need as much money. By lowering the user fees the premiums will hopefully go lower.
Who Benefits From the Reduction
With lower premiums on the Marketplace, people who get no tax credit and have to pay the full premium will save money. Also, this will save the taxpayer money, because they fund the advance premium tax credit to help make the premiums affordable.
You can check out the article here on CMS.
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