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The Department of Health and Human Services has awarded nearly $220 million to 13 states that have shown significant progress in planning and creating health insurance exchanges (HIX) to help them advance to the next level.
The funds will provide the states with more flexibility and resources to deploy the marketplaces where consumers can shop and compare for a private health insurance plan that fits their needs. The exchanges are slated to go live in 2014 under the Affordable Care Act.
The thirteen states receiving the funds are Alabama, Arizona, Delaware, Hawaii, Idaho, Iowa, Maine, Michigan, Nebraska, New Mexico, Rhode Island, Tennessee and Vermont.
Twelve of the states are receiving Level One grants, which funds for one year the exchange activities of states that can point to progress using their exchange planning grant. Level One grants may pay for consultation with stakeholders; analyzing data; design and building of business operations and systems for the exchange, and beginning to integrate existing Medicaid eligibility systems with that of the exchange, according to HHS.
The 13th state, Rhode Island, is receiving the first Level Two grant, which funds states that are further along in the planning process for multiple years. Level Two grants may go towards IT infrastructure design and development; establishment of integrated consumer support; and governance and staffing.
Rhode Island, which received $58.5 million through 2014, said it will begin building its capacity in health plan certification and qualification; financial sustainability; and oversight and financial integrity, according to HHS.
With these grant awards, 29 states have demonstrated substantial momentum in developing the exchanges.
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Insurers will supply new information, such as an easy-to-understand summary of benefits and costs to consumers. The level of detail will sharpen competition between carriers, which will drive costs down, said HHS Secretary Kathleen Sebelius in the Nov. 29 announcement.
“Exchanges will give consumers more choices and make it easy to compare and shop for insurance plans,” she said, adding that HHS wants states to put the Affordable Care Act into practice in the way that works for them.
Forty-nine states and the District of Columbia have already received planning grants, and 45 states have consulted with consumer advocates and insurance companies. Thirteen states have passed legislation to create an exchange.
HHS also released FAQs in anticipation of state legislative sessions beginning in January. Answers will help advance state policy-makers develop exchanges. For example, they clarify that exchange grants can be used to build a state exchange that is operational after 2014 and that state-based exchanges will not be charged for accessing federal data needed to run exchanges in 2014.
HHS will also allow options in eligibility determinations. For example, a state-based exchange may permit the federal government to determine eligibility for premium tax credits.
States have more opportunities and time to apply for funding. HHS has extended the deadline by six months to June 29, 2012, for Level One establishment grant applications.