State Laws Hinder Obamacare Effort to Enroll Uninsured

President Barack Obama has set aside $67 million to make it easier to enroll in his health-care overhaul. Laws pushed by Republicans in 12 states may keep that from happening.

Under the Affordable Care Act, the U.S. government plans to pay a network of local groups known as navigators to explain the law’s new coverage options to the uninsured and guide them through its online insurance markets.

New laws passed by a dozen Republican-led states, the latest in Missouri last month, may make that harder, imposing licensing exams, fines that can run as high as $1,000 and training that almost doubles the hours required by the federal government. Republicans say the measures will protect consumers. Obamacare supporters say they’ll undermine the effort to get as many people as possible enrolled.

The rules are “like voter intimidation,” said Sara Rosenbaum, a health law professor at George Washington University in Washington, D.C., who supports Obama’s act. “In many, many cases these laws may be a direct interference with outreach assistance and that’s going to be quite serious.”

The Obama administration awarded 105 grants last week, steering money to hospitals, social-service agencies, local clinics and other groups. The navigators are meant to offer “unbiased information” to help people through the complexities of the new system, with its deductibles, copays, provider networks and tax credits, according to an Aug. 15 statement from the U.S. Department of Health and Human Services.

October Deadline

The grants were issued barely a month before the online exchanges are scheduled to open for enrollment on Oct. 1. The administration has said about 7 million people may enroll next year and it needs to motivate millions of young, healthy customers to sign up to keep the markets financially stable.

The state laws may complicate that task. The restrictions go farthest in a handful of states like Georgia and Missouri, where Republican legislators have already refused to set up the new insurance websites or spend money to promote the law.

In Florida this week, Governor Rick Scott told a Miami audience that federal privacy protections for consumers working with navigators were “behind schedule and inadequate.” He urged people to use brokers and agents instead.

Georgia Governor Nathan Deal, a Republican, believes navigators need state regulation because they’ll give advice on “a highly complicated and highly important topic,” his spokesman, Brian Robinson, said in an e-mail. They will also handle personal information that is open to abuse.

Consumer Protection

“This is a consumer protection issue more than anything,” said Kenneth Statz, an insurance broker on the legislative council of the National Association of Health Underwriters, a Washington-based group representing agents and brokers. “We just want to make sure that somebody who is sitting down with a consumer, trying to help them make this major decision, is going to be properly prepared.”

The state laws have passed with the backing of insurance agents and brokers, who view the online exchanges as competition and navigators as potential rivals with an unfair advantage absent new rules.

States require agents to be licensed and undergo periodic training, said Statz, who’s based in Brecksville, Ohio. He also has to carry insurance to protect clients who may be hurt by bad advice or malpractice, he said.

The 2010 law is intended to prod millions of Americans to buy health insurance, many for the first time. Those seeking coverage must provide details on citizenship, family size and income to determine whether they’re eligible for subsidies, and complete a form that can stretch to seven pages.

Federal Requirements

While states controlled by Democrats such as Maryland, New York, Minnesota and Illinois have also passed rules, these generally follow federal requirements, said Mark Dorley, a health-policy researcher at George Washington University.

Other states have been more restrictive.

Georgia’s navigators need a license from the insurance commissioner. Each person assisting the uninsured has to pay a $50 application fee, complete 35 hours of training -- 15 more than the federal requirement -- pass an exam, and complete a criminal background check. Licenses must be renewed every year, requiring another $50 and 15 more hours of training.

Missouri defines navigators more broadly than the federal government, said Andrea Routh, executive director of the Missouri Health Advocacy Alliance in Jefferson City. Violating certification requirements risks a $1,000 fine.

Seeking License

Routh’s group, which seeks to educate people on the health law, didn’t apply for a grant. It may seek a license just to be safe, she said.

“Anyone who does outreach and education, or anybody who assists anyone with enrollment had better be checking that law to see if they need to be licensed,” she said.

Missouri voters approved a ballot initiative last year barring Governor Jay Nixon, a Democrat, from setting up the exchange without the assent of the Republican-controlled legislature, which has declined to act so far.

The rules may scare off churches, clinics or others who want to help, said Cindy Zeldin, executive director of Georgians for a Healthy Future. The Atlanta-based nonprofit was part of a group that won a $2.1 million grant.

Georgia’s law implies “navigators are somehow problematic,” she said in a telephone interview, “rather than that they’re groups that likely have a history of working in communities and are trusted.”

‘In Conversations’

The Obama administration has been “in conversations with states” to ensure their laws don’t hinder the effort, said Chiquita Brooks-Lasure, a deputy director at the federal health department, in an Aug. 15 conference call with reporters.

The federal law doesn’t require background checks, though navigators must provide quarterly reports and can lose their grants in cases of fraud or abuse. The administration is requiring them to undergo an initial 20 hours of training.

Some people opposed to Obama’s overhaul “want to see it fail,” said Missouri Health’s Routh. “If you put a lot of barriers in place that make it tough for nonprofits to go out and educate people and assist them in understanding the exchange, that may be one way to have it fail.”

To contact the reporters on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net; Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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