The Trump administration is cutting funding for Obamacare outreach ads by 90 percent and cutting grants to groups that sign up people for Obamacare by nearly 40 percent for upcoming 2018 open enrollment.
The administration says the reason for the cuts, compared to 2017's open enrollment, is to be more efficient and provide money to activities more likely to get a return on investment in terms of sign-ups. The 2018 open enrollment starts on Nov. 1, and the administration has taken heat from activists and Democrats that it isn't going to do enough to provide outreach.
For the 2017 open enrollment, which ended Jan. 31, the Obama administration spent $100 million on ads. That was double the $50 million that was spent on ads for the 2016 open enrollment.
In comparison, President Trump's inaugural Obamacare open enrollment will spend $10 million on ads. The money will also go towards different types of ads, focusing on more targeted ads through e-mail, texting, radio, or digital engagement, an official from Health and Human Services said.
The Trump administration downplayed the impact of boosted ad spending, noting that during 2017 open enrollment there was a decline of 5 percent in overall sign-ups. It also saw a 42 percent decline in first-time enrollment and enrollment of people who pay their premiums decline by 500,000 people.
It added the $10 million is consistent with promotional spending for Medicare Advantage and Medicare Part D.
An HHS official also said the public is more aware of Obamacare since 2018 will be the fifth open enrollment. However, the official conceded the Trump administration did not do any new studies on public awareness of the program.
The federal government gets funding for running and promoting Obamacare's marketplace through user fees taken from Obamacare insurers, although administration officials have hinted more money is devoted to Obamacare than what it gets from user fees. However, the administration did not provide a number on how many extra funds Obamacare has gotten in prior years.
The administration said money from the fees previously used on ads and navigator grants will go towards beefing up controls to clamp down on inappropriate sign-ups and exploring the use of third-party websites states can use besides healthcare.gov to sign up for Obamacare. Residents in 39 states and the District of Columbia use healthcare.gov to buy Obamacare plans.
The decision by the Trump administration on advertising did not come as a surprise considering the administration pulled about $5 million in ad funding at the tail end of 2017's open enrollment in January.
The administration is also cutting grant funding to navigators, which are organizations that aim to help people sign up for Obamacare. The grant program has been met with criticism from Republicans that it doesn't sign up enough people for the money that it gets.
The Trump administration noted that in 2016 navigators got $62.5 million in federal grants to enroll just 81,426 people, about 0.7 percent of total enrollees. It added 17 navigators enrolled less than 100 people each, an average cost of $5,000 per enrollee.
The administration is cutting the amount of grant funding for 2018 by nearly 40 percent. The federal government offered $62.5 million in grants for 2017 and will only offer $37.8 million in 2018.
The Trump administration will also employ a new performance-based formula to give out the grant funds, with groups getting funding based on their ability to sign up people.
"We believe we are adequately funding and rewarding those that have been successful," another administration official said.
Democrats and advocacy groups have lashed out at the administration over Obamacare outreach. House and Senate Democrats have called for a briefing from HHS Secretary Tom Price and Centers for Medicare & Medicaid Services' Administrator Seema Verma on the planned outreach.
The 2018 open enrollment is expected to start on Nov. 1 and last until Dec. 15, a full six weeks shorter than the 2017 open enrollment period.