HHS Awards $220 Million to 13 States for Insurance Exchanges

The U.S. Department of Health and Human Services awarded $220 million in establishment grants for states that have made progress in setting up their health insurance exchanges.
by | November 29, 2011

The U.S. Department of Health and Human Services (HHS) announced Tuesday it has awarded $220 million in grants to 13 states to aid in the implementation of their health insurance exchange programs.

Twelve states -- Alabama, Arizona, Delaware, Hawaii, Idaho, Iowa, Maine, Michigan, Nebraska, New Mexico, Tennessee and Vermont -- received Level One grants, according to a HHS press release. Those grants provide one year of funding for states that have been already made progress in setting up exchanges since receiving a planning grant from HHS. Rhode Island became the first state to receive a Level Two grant, which provides multi-year funding that is given to states even further along in their exchange planning stages.

The health insurance exchanges, established as part of the Affordable Care Act, are designed to be a "one-stop marketplace" that allows individuals to shop for private insurance plans with basic information about plans and eligibility available, according to HHS. States can choose set up their own insurance exchange by 2014 or the federal government will institute one for those that don't.

The Level One grants range from $1.6 million for Tennessee to $34.3 million for New Mexico. Rhode Island received $58.5 million for its Level Two funding, which lasts until Dec. 31, 2014.

In total, 49 states plus the District of Columbia have already received up to $1 million each in initial planning grants. Sixteen states (including Rhode Island) and the District of Columbia had previously received Level One grants in May and August, bringing the total number of states that have received Level One grants to 28 after Tuesday's announcement.

HHS also announced Tuesday that it would extend the application period for states seeking a Level One grant to June 29, 2012, to accommodate state legislative sessions. The original deadline was Dec. 30, 2011. The department also clarified that states can use federal grant money to set up their exchange even if the federal government must operate the exchange after the Jan. 1, 2014, deadline until the state is ready to take over the exchange's operation.

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