NAIC panel develops navigator licensing framework

State and federal regulators are developing procedures that could be used to regulate the new health insurance exchange "navigators," or consumer assistance providers.

The Producer Licensing Task Force, an arm of the National Association of Insurance Commissioners, is seeking public comments on a "discussion framework," or a rough outline of task force members' ideas about navigator oversight.

The Center for Consumer Information and Insurance Oversight (CCIIO) is hoping to release federal guidance on navigator regulation in January 2013.

At the Producer Licensing Task Force, "some individuals said navigators would guide consumers through the entire health care selection and purchasing process and this will require navigators to be licensed as producers," task force officials say in a summary of their framework. "Other individuals said navigators would make health plans available to consumers but consumers would ultimately decide what health plan to select. Because of this, navigators would not be selling, soliciting or negotiating insurance and would not need to be licensed as producers."

Task force officials say states could either wait to find out what CCIIO's parent, the U.S. Department of Health and Human Services (HHS), really thinks about navigator regulation, or go ahead on their own and base navigator standards on the standards already applied to agents and brokers who sell Medicare supplement plans and other health insurance plans to seniors.

The PPACA exchanges

The Patient Protection and Affordable Care Act of 2010 (PPACA) calls for the state and federal agencies in charge of the PPACA exchange system to have navigators ready to help consumers use the system by Oct. 1, 2013.

PPACA drafters included the exchange provisions in an effort to help consumers and small employers do a better job of shopping for health coverage.

The exchanges, or Web-based health insurance supermarkets, are supposed offer individual consumers, families and small groups menus of standardized, high-quality health plan options. Low-income and moderate-income consumers and some small groups are supposed to be able to use new federal tax credits to pay for the coverage.

Some states are trying to build their own, homegrown, state-based exchanges.

Other states plan to have HHS set up HHS-run "federally facilitated exchanges" (FFEs), or share the exchange job with HHS and create state-HHS "partnership exchanges."

A navigator is supposed to be a kind of neutral ombudsman who will help consumers — including poor consumers who have never used any kind of public or private health insurance — figure out how to use the new exchange system. Some provisions in PPACA seem to indicate that the navigator program might be temporary.

Originally, it was not entirely clear whether the term "navigator" would refer to an advice organization, an individual working for an advice organization, or both. Regulators now seem to be using the term "navigator" to refer to individuals.

Navigators can collect service fees from the exchange programs and from their clients, but they are not supposed to collect commissions or other compensation from health insurers.

PPACA calls for each exchange program to offer consumers a choice of using two or more types of navigators. One of the types of navigators who are available must be a community-focused or consumer-focused nonprofit.

Health insurance agents and brokers have suggested that the navigator program could put unsophisticated consumers at the mercy of poorly trained call center representatives who know little about commercial or public health insurance programs.

In a recent answer to a "frequently asked question," CCIIO officials seemed to indicate that states can apply licensing rules to navigators that are comparable to the rules they apply to producers, as long as the navigators are not called producers or licensed as producers.

The navigators cannot be called producers or licensed as producer, because, if all navigators in a state were producers, the state's exchange program could not meet the PPACA requirement that an exchange offer consumers access to at least two different types of navigators, CCIIO officials said.

Critics of PPACA are citing the current lack of state or federal navigator standards as an example of what they say are bigger problems with organize the exchange system in time to meet the deadlines set by PPACA.

Dennis Smith, the Wisconsin health services director, talked about the PPACA provision requiring the U.S. Department of Health and Human Services (HHS) — CCIIO's parent — to have navigators ready to advise the consumers using federally run exchanges in Wisconsin and a number of other states by late 2013.

To meet that goal, HHS will have to train workers to understand the Medicaid eligibility rules and other program eligibility rules in Wisconsin and other states with federal exchanges in just 10 months, Smith said.

"It's a little hard to accept that," Smith said.

The framework

The Producer Licensing Task Force draft framework calls for state to start the navigator application process by collecting general demographic, education and employment history information from an applicant.

The applicant also should provide the information needed to conduct a criminal background check and information that could help regulators detect potential conflicts of interest, according to the draft.

Navigator candidates would get at least 24 hours of classroom training, and, on the last day of the course, the candidates would have to get a score of at least 70 percent on a 100-question review.

Certified navigators would have to get 12 hours of at least continuing education per year.

An exchange would have to create a mechanism that a consumer could use to file a complaint against a navigator.

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