The Health and Human Services Department will provide $229 million more to 10 states that have shown progress in building their health insurance exchanges and said it is prepared to send more money when states request it.
HHS has directed funds to states to plan and begin to establish their insurance exchanges as they take shape, including operational staff, consulting services and the administrative infrastructure, according to department senior officials Feb. 22.
The health reform law calls for the creation by 2014 of the online health insurance marketplaces where individuals and small businesses can shop for and compare health coverage.
The Patient Protection and Affordable Care Act gives states flexibility in how they design their exchanges. And states are at varying levels of progress.
The states awarded the establishment grants are: Arkansas, Colorado, Kentucky, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania and Tennessee. Establishment grants are usually for one year but can be extended if the state requests, said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight (CCIIO) in the Centers for Medicare and Medicaid Services.
Of the grantees, Arkansas, Colorado, Massachusetts, New Jersey and Pennsylvania are receiving an exchange establishment grant for the first time. The other five states are on their second round of such grants.
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Thirty-three states, including the District of Columbia, are now receiving establishment grants, having demonstrated that they are making significant progress in developing their insurance exchanges, he said. HHS has also funded IT innovator awards to seven states or groups of states, including Massachusetts.
Many states are proceeding with work on their state-based exchanges or a federal partnership model even though they may not yet have legislative authority to develop an exchange.
“It is not a requirement to have legislative authority to get an establishment grant,” Larsen said in a briefing with reporters.
“There are a lot of bills in play in this year’s sessions, but it’s not a barrier for states, and most states are moving forward with forming state-based exchanges, even those that may not yet have legislation,” he said.
To just get started on initial work for the exchange, 49 states and D.C. have received planning grants, he said.
“All American will have access to quality, affordable health care once the Affordable Care Act is fully implemented,” said HHS Secretary Kathleen Sebelius, adding that these measures will help states make that happen.
HHS also finalized a rule that enables flexibility for states, including the option for an innovation waiver, so they may pursue their own healthcare strategies to make sure that their residents have access to quality and affordable health insurance.
However, states must include an implementation timeline for their solution in their application for a state innovation waiver, Sebelius said.
The rule proposed last July set up a road map and options for how states were to structure and deploy the exchanges, including setting standards for putting them in place and aligning their information systems, and performing the basic functions of an exchange.
