This is the most brazen act of Obamacare sabotage yet

The Trump administration has let funding for Obamacare’s $63 million in-person outreach program lapse, leading to layoffs and confusion among nonprofits that enroll vulnerable populations in coverage.

“I have delivered 10 layoff notices to staff members,” says Donna Friedsam, director of Covering Wisconsin. “We don’t have a funding flow anymore.”

The government had previously announced it would cut the budget for Obamacare’s navigator program by 41 percent. But right now, the program has no funding at all. Last year’s grants ran out on September 1, and the administration still has not awarded next year’s money.

The sudden funding halt comes at a critical time for the Affordable Care Act. Navigator groups were just beginning to ramp up outreach for the health law’s open enrollment period, which begins November 1. Now, some have done an about-face: They’ve canceled outreach work and appointments with potential enrollees because they have no budget to cover those costs.

These groups often work with the most vulnerable populations enrolled under the Affordable Care Act. One-third of those who seek in-person help signing up for coverage do not have internet at home, and one in 10 do not speak English.

Navigator organizations say the administration has not made clear when the 2018 funding will arrive, although it could be as late as September 30. Health and Human Services, which oversees the program, has said that this funding will not be retroactive, meaning there may be no budget for activities this month, according to three navigators who have spoken with officials there.

“As someone who has worked on many federal grants, this is really unusual,” Friedsam says. “Usually if the grant letter shows up late, it still goes back to the project start date. The Trump administration is essentially saying, you need to deconstruct your organization on September 1 and reconstruct it on whatever day we provide funding. In what world is that possible?”

Letting the Obamacare outreach budget lapse goes well beyond the promised 40 percent budget cut. It means that, right now, enrollment groups currently have no budget at all — and no resources to prepare for an open enrollment season that begins in 54 days.

The Obama administration spent $62.5 million in 2016 providing grants to nonprofits and health clinics to help Americans sign up for health coverage. This “navigator” program paid enrollment workers to assist with enrollment and advertise the open enrollment period to their community (through things like phone calls and health fairs).

The Trump administration announced on August 31 it would reduce the navigator program’s budget to $36 million. It will focus its budget cuts on the navigator grantees that have fallen short of their enrollment goals. A navigator grantee, for example, who only hit 30 percent of its enrollment goal this year will get just 30 percent of its expected budget for next year (no grantees will be defunded entirely — the first HHS official said they’d set a floor of $10,000 for all participants).

Navigator grantees expected that their new, smaller budgets for 2018 would follow that August 31 announcement because the 2017 budget was set to run out September 1.

But one week later, seven navigator groups interviewed by Vox say no information about their new budget has arrived, and they have no funding source. As one navigator grantee put it, “It’s been total crickets.”

“We know nothing right now,” says Shelli Quenga, who runs a navigator group, the Palmetto Project, in South Carolina. “I laid off two people today and cut everybody else back to part-time for the remainder of the month. We have to pull from our own money at this point.”

Quenga says her group has relied on a small stockpile of private donations to get through this week but that they’re operating with a skeleton staff. She has cancelled appearances for later this week, where she was supposed to educate other community groups about the upcoming open enrollment season, because she doesn’t have the budget to travel.

Usually, her group maintains a website where people who want to sign up for Obamacare outside the traditional enrollment period — who qualify for Medicaid, for example, or just moved to the state — can come in and seek help. But this week, they took that calendar down.

“We’re taking our schedules down and not making appointments available,” Quenga says. “I’ve curtailed everyone’s mileage because a lot are community based.”

Friedsam, who runs Wisconsin’s largest navigator grant, says that her group exceeded its enrollment targets. This means that they should be safe from any budget cuts, which administration officials say will target underperforming organizations.

Still, she found herself handing out 10 layoff notices to staff because she doesn’t currently have any funding stream.

She worries that, by time the funding does arrive, she won’t be able to recruit those people back.

“If CMS intends to provide notice of the grant award three weeks from now, that may be all well and good, at that point I may have lost my well-trained staff,” says Friedsam. “To re-constitute my staff in time for an open enrollment that begins November 1 is going to be extremely hard.”

Friedsam has begun setting up meetings with local government officials to see if they can act as a stopgap until the federal dollars arrive.

Sonja Smith, who runs the navigator program at AIDS Alabama, initially expected that the federal government would let her use the 2018 grant to cover early September, even though the letter hadn’t arrived quite yet. But conversations she had this week — similar to those described to Vox by other navigators — suggest that the Trump administration will not let grantees use the funds to cover this week before they’re officially allocated.

“The assumption was we would be reimbursed,” Smith says. “Now, we’re not sure if we will be. I have to sit down with our financial person and we might have to furlough a couple of people.”

A Health and Human Services spokesperson declined to comment on when the information on the grants would be released, only saying “that information is forthcoming.”