How Medicare’s little-known SHIP program works to guide beneficiaries

Among the many changes the Trump administration has made to the Department of Health and Human Services (HHS) since January—including laying off 10,000 employees and slashing federal funds—is the dismantling of the Administration for Community Living, or ACL.

ACL is an agency within HHS that funds services for older people, such as centers for independent living. In March, HHS announced ACL’s services would be moved under other agencies, including the Centers for Medicare and Medicaid Services, and that roughly half the staff (or about 100 people) would be laid off.

In addition to things like food delivery for older people via Meals on Wheels, ACL also runs a lesser-known service called the State Health Insurance Assistance Program, or SHIP. Through it, counselors help Medicare beneficiaries understand their health insurance options, enroll in a plan, and file an appeal or grievance with the payer.

Experts from the think tank Urban Institute wrote in April the restructuring and layoffs could “make it more difficult to effectively administer the programs ACL once oversaw,” such as SHIP.

SHIPs “serve a really important role” in the Medicare program “because there really is no other resource to help beneficiaries that way,” Gretchen Jacobson, VP of Medicare at healthcare research foundation the Commonwealth Fund, told Healthcare Brew.

Breaking down SHIPs

The SHIP program was created under the Omnibus Budget Reconciliation Act of 1990 and consists of roughly 12,500 staff members at more than 2,200 sites across all 50 states (plus Puerto Rico, Guam, the US Virgin Islands, and Washington, DC) who give beneficiaries guidance on navigating Medicare either in person, virtually, or via phone.

SHIP programs are federally funded and typically operated by state and county agencies focusing on aging residents, according to Jack Hoadley, research professor emeritus at Georgetown University’s McCourt School of Public Policy.

Helping beneficiaries navigate Medicare is an important component of the program because it can be pretty complex, Jacobson said.

In a 2023 survey from Medicare seller MedicareAdvantage.com, 64.6% of beneficiaries said they found Medicare “hard to understand.” And a 2022 survey from healthcare marketing firm Sage Growth Partners found 58% of beneficiaries stay in the same plan every year instead of reviewing their options because they find it difficult to understand.

Beneficiaries have around 40 Medicare Advantage plans to choose from in addition to traditional Medicare and Medigap options, Jacobson noted.

“There’s a lot of different layers of complexity for people on Medicare that even go beyond the complexity that people with commercial insurance face,” she said.

Unlike traditional insurance brokers, SHIP counselors aren’t employed by insurance companies and receive no financial incentives to steer beneficiaries to certain plans, so their advice is unbiased, Jacobson added.

From April 2022 to March 2023, SHIP counselors provided individual assistance to 1.7+ million people eligible for Medicare and their caregivers, according to experts at Georgetown University’s Medicare Policy Initiative.

But lack of awareness is a big problem. A 2024 study from the Commonwealth Fund found only 1 in 20 Medicare beneficiaries are aware SHIPs exist.

Running a tight SHIP

Before the ACL’s restructuring, SHIPs were already challenged by very tight budgets, Jacobson said.

The programs are allocated roughly $55 million per year in discretionary funds and about $15 million per year in mandatory funds from the federal government.

As of May 2025, there were roughly 69 million people enrolled in Medicare, so the $70 million total equates to about $1 per beneficiary, according to Melissa Garrido, a research professor in the Department of Health Law, Policy, and Management at the Boston University School of Public Health.

On top of the low funding, SHIP has also recently faced threats of budget cuts.

Experts at Georgetown University’s Medicare Policy Initiative reviewed a draft leaked from the HHS’s Office of Management and Budget in April that proposed cutting all $55 million of the program’s discretionary funding.

However, the House Appropriations Committee released its FY 2026 bill on Sept. 1, which includes the discretionary funding. The bill was approved by Republicans on Sept. 2 and sent to the full House committee for approval, Politico reported.

Relying on volunteers

Without many resources to pay staff, SHIPs rely on volunteer counselors, Hoadley said.

The volunteers are often people who’ve retired from “very technical professional jobs,” particularly those with a healthcare background, according to Garrido.

They go through “intensive” training on all aspects of Medicare, Garrido said. But regardless, knowledge gaps can be prevalent. An April 2025 study, which Garrido coauthored, found the mean percentage of “accurate and complete answers” SHIP counselors provided to beneficiaries was 40%.

“Policymakers should consider providing SHIP with additional resources for training and capacity improvements,” the authors concluded.