Democratic Health Leaders Question Trump Administration’s Use of ACA Marketplace User Fees

“Congress and the American public are entitled to understand how CMS is spending these funds”

WASHINGTON – House and Senate Democratic health leaders sent a letter to Health and Human Services (HHS) Secretary Alex Azar and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma today requesting detailed information on the Trump administration’s spending of user fees generated by the Affordable Care Act (ACA) Marketplace exchanges, including HealthCare.gov.    

The letter was signed by Education and Labor Chairman Bobby Scott (D-VA), Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ), Ways and Means Chairman Richard Neal (D-MA), Senate Finance Ranking Member Ron Wyden (D-OR), and Senate HELP Ranking Member Patty Murray (D-WA).

“The Administration’s record of undermining enrollment in the Marketplaces, including by cutting funding for vital functions such as marketing and outreach, as well as spending agency funds on ‘repeal and replace’ propaganda, raises questions about whether the dedicated funding is being spent effectively, legally, and appropriately to enhance Americans’ access to comprehensive health insurance,” the Democrats wrote.

Last year, CMS made the decision to gut funding for consumer outreach and assistance for enrolling in the Marketplaces, reducing funding from $100 million to just $10 million — a 90 percent cut.  The agency also slashed funding for navigator programs by 40 percent.

“Given the agency’s clear intent to undermine enrollment in the Marketplaces by reducing funding for vitally important Marketplace functions, it is unclear why CMS continues to charge states that use the federal platform a 3.5 percent user fee,” the Democrats continued in their letter to Azar and Verma. “Congress and the American public are entitled to understand how CMS is spending these funds, which likely represent billions of dollars in federal spending, and whether the agency is using them solely for the purpose of supporting the functions of the Federal Marketplace.” 

CMS also recently decided to increase the user fee rate for State-Based Marketplaces that employ the federal platform from 2 percent to 3 percent.  The five health leaders wrote that states that use the federal platform are entitled to understand how these funds are being spent and whether they are getting good value for their dollars, so they can determine if they want to continue to employ the federal platform. 

As part of their inquiry, the Democrats are requesting a series of documents related to the Trump administration’s use of user fees collected, including:

  • The overall amount of user fees collected, as well as a detailed accounting of how these funds were spent in each year;
  • Detail on what capital investments have been made to improve the functioning of the Federal Marketplace in 2017 and 2018, as well as any plans for future investments;
  • A briefing on the Administration’s outreach and enrollment expenditures for 2019 Marketplace plans. 

The Democrats’ letter is available here

Press Contact

Scott: Stephanie Lalle (202) 226-0853

Pallone: CJ Young (202) 225-5735

Neal: Erin Hatch (202) 225-2856