Takeaways
- State Health Insurance Assistance Programs (SHIPs) offer free, unbiased guidance to Medicare beneficiaries, helping them navigate complex options and avoid costly mistakes.
- Recent budget cuts and proposed structural changes to the Administration for Community Living (ACL), which oversees SHIP, threaten its operations and could lead to reduced services and access for vulnerable populations.
Anyone who has shopped for health insurance plans knows that a plethora of options is available. Yet trying to find the plan that best fits your needs can be daunting. Not only do the plans have many features but what they cover and how much they will cover can also be hard to discern.
The federal government’s health insurance program, Medicare, can be as confusing as the open market. If you are eligible for Medicare and need help navigating the system, you can turn to your local State Health Insurance Assistance Program (SHIP).
What Is SHIP?
Congress established SHIP in 1990 to give free, unbiased guidance to help people understand their Medicare options. The SHIP network receives federal funding via the Administration for Community Living (ACL), which is part of the Department of Health and Human Services (HHS).
More than 12,000 paid and volunteer staff serve at over 2,200 SHIP sites across all 50 states, plus Puerto Rico, Guam, the U.S. Virgin Islands, and Washington, D.C. In 2022, SHIP counselors provided one-on-one assistance to over 4 million Medicare recipients and caregivers.
SHIP Services
SHIP provides valuable services to current Medicare recipients and those who are eligible for Medicare. Individuals who are new to Medicare, such as those who are turning 65 or who have a qualifying disability, can get help figuring out whether Original Medicare or Medicare Advantage is best for them. They can also obtain guidance on the various parts of Medicare, such as Part D and Medigap.
Medicare enrollees can get assistance from SHIP each year during open enrollment to review and switch plans if needed. SHIP also offers support with appeals and grievance processes, provides education on resources that help pay for Medicare, such as the Extra Help program, and may also hold local outreach events and share fraud prevention tips.
Why SHIP Matters
SHIP provides value in various ways for all those who use it.
Complexity of Medicare
With multiple parts (A, B, C, D), plus supplemental (“Medigap”) coverage, private Medicare Advantage plans, and various savings program options, Medicare can be bewildering. SHIP provides guidance in the form of neutral, trustworthy help.
Unbiased Advice
SHIP counselors do not receive commissions or indirect incentives tied to plan enrollment. As a result, they are generally considered more trustworthy and less biased than brokers or agents who may have financial ties to insurers.
Access and Local Help
SHIP can be a valuable resource in many rural or underserved areas for personalized help. Local offices know the particulars regarding local providers and which plans may be effective in a specific area. This information can help enrollees avoid mistakes, like picking a plan that doesn’t include the local pharmacy or certain specialists.
Cost Savings and Preventing Harm
By preventing enrollment mistakes, helping people get needed coverage and benefits, and aiding with appeals or understanding rights, SHIP can help prevent higher downstream costs, such as unexpected out-of-pocket costs and uncovered services. SHIP also helps protect older adults from being steered into inadequate or expensive plans.
Recent Budget Cuts and Policy Changes
In recent several months, some proposals and actions have put SHIP at risk.
ACL’s Reorganization
The HHS is dissolving the ACL and moving its programs into a new division. ACL currently houses SHIP, among many other aging, disability, and elder care support programs. Roughly half of ACL’s staff has been laid off, affecting staff levels in leadership, policy, budget, and regional offices.
Potential Cuts to SHIP Funding
A leaked budget draft from the HHS’s Office of Management and Budget proposes eliminating SHIP’s $55 million in discretionary funding. This roughly 80 percent cut in overall funding for the program would leave only $15 million in mandatory funds intact. However, as of early September 2025, the discretionary funding remains in the budget for 2026.
Discretionary funding supports key parts of the program, such as training, advertising and outreach, organizational infrastructure (phone lines, local offices, websites), and volunteer support. Without such funding, state and local SHIP offices would have to scale back operations or possibly shut down.
Flat Funding and Rising Demand
SHIP has been operating with relatively flat federal funding for years, while the number of Medicare beneficiaries has grown. That means per-beneficiary resources have been shrinking. Inflation, rising medical costs, greater complexity (more Medicare Advantage plans, more drug options, changing regulations) all increase the cost of counseling and outreach tasks.
Effects of Staffing Cuts and Structural Reassignments
Amid these changes, administrative oversight and support functions, such as grant administration and guidance to states, are at risk. These operations are essential for ensuring coverage of SHIP services across the many local offices.
Reassigning SHIP supports to a new agency may introduce disruptions, delays, or loss of institutional memory. Local sites depend on stable funding, consistent guidance, and coordinated training. Sudden policy shifts may degrade that.
Consequences of Staff and Funding Reductions
If the proposed cuts go through, several harmful effects could follow, such as:
- Reduced access to in-person or personalized help. Many smaller or rural SHIP offices might close, reduce hours, or shift to more virtual-only help. People without good internet access or who prefer face-to-face assistance would suffer.
- Longer wait times and less assistance for appeals and complex cases. Without enough trained staff or volunteer infrastructure, SHIP may be unable to serve people with complicated needs, such as changing plans and filing appeals for coverage denials.
- Reduced outreach and education. Without discretionary dollars, less money will be available for advertising SHIP services, and less outreach means fewer people benefiting.
- Greater risk of being steered toward less-desirable options. Without reliable, neutral, local sources of advice, people may rely on agents or brokers who have financial incentives or knowledge only on Medicare’s centralized resources (which may not be sufficient or tuned to the local context). This may lead people to make choices that are less financially or medically optimal.
- Worsening inequities. Vulnerable populations, including low-income, rural, and non-English-speaking people and individuals with disabilities, may be disproportionately harmed. They tend to rely more on free local help and may be less able to navigate complex systems without assistance. If SHIP offices scale back, these groups will likely lose this support.
- Potential for higher health costs downstream. Errors in enrollment, misunderstandings leading to lapses in coverage, or failure to access the most beneficial plan could cause higher out-of-pocket spending, more use of emergency health services, and lower preventive care uptake.
Policy and Political Status
Though current budget proposals include cutting discretionary funding for SHIP and dissolving ACL, Congress still controls appropriations. In some recent appropriations bills, discretionary funding remains intact.
The Older Americans Act (OAA) , which authorizes many ACL programs, needs to be reauthorized by Congress. Continuing resolutions have provided funding for OAA programs through fiscal year 2025. However, SHIP’s future relies on timely reauthorization, adequate appropriation levels, and other statutory mandates.
SHIP plays a vital role in helping millions of older Americans, people with disabilities, and caregivers make sense of a complicated and shifting Medicare landscape. Because it provides unbiased, individualized, and locally based advice, it fills a gap that other entities, like insurers and brokers, can’t or won’t fill as effectively.
However, the combination of flat funding, proposed discretionary budget cuts, staff cuts, and ACL’s dissolution and restructuring threatens SHIP in significant ways. Many local SHIP offices may be forced to cut back or close, reducing access at a time when more people are relying on them.
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