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Creating a New Competitive Marketplace: Affordable Insurance Exchange Establishment Grants Awards List

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Posted: August 12, 2011 - 10:15 am ET


When the Affordable Care Act is fully implemented in 2014, individuals and small businesses will have access to affordable coverage through a new competitive private health insurance market – state-based Affordable Insurance Exchanges. On August 12, 2011, 13 states and the District of Columbia were awarded over $185 million dollars in Exchange Establishment grants. Three states, Indiana, Rhode Island and Washington, were awarded grants on May 23, 2011.

These grants are just the latest in an ongoing series of Affordable Care Act grants to help states develop Exchanges. Already, 49 states and the District of Columbia received Exchange Planning grants, seven states received Early Innovator grants, and a number of states have indicated interest for future rounds of Exchange Establishment grants. While states are moving at different rates in the planning and establishment process, the vast majority of states have already taken the crucial early steps in building these new marketplaces. Numerous states have already expressed interest in applying to future rounds to build a robust Exchange for their residents.

Affordable Insurance Exchange Grants

Affordable Insurance Exchanges will provide individuals and small businesses with a “one-stop shop” to find and compare affordable, quality private health insurance options. With these Exchanges, Americans will no longer be on their own in trying to find comprehensive, affordable health coverage that is right for their needs. Exchanges will bring new transparency to the market so that consumers will be able to compare plans based on price and quality. By increasing competition between insurance companies and allowing individuals and small businesses to band together to purchase insurance, Exchanges will help lower costs.

On January 20, 2011, the U.S. Department of Health and Human Services (HHS) announced a new funding opportunity for Exchange Establishment grants to help states continue their work to implement this key provision of the Affordable Care Act.

The Exchange Establishment grants recognize that states are making progress toward establishing Exchanges but are doing so at different paces. States can choose when to apply for grant funding based on their needs and planned expenditures and states will have multiple opportunities to apply for funding in the years ahead. Future applications for grants will be accepted quarterly, with the last deadline on June 29, 2012. Awards will be made approximately 45 days after the application due date. This process gives states maximum flexibility and ensures that states can move forward on their own timetables as they work to build an Exchange

Each state’s insurance market is unique, and each state will require different levels of support as they create their Exchange. The final determination of each state’s grant award was made following a thorough examination of funding requested by the state, and an analysis of what would be a reasonable funding amount from the federal government.

There have been two previous series of grants to assist with the construction of state-based Exchanges:

  • Forty-nine states and the District of Columbia received up to $1 million in Exchange Planning Grants. Four territories received similar grants on March 21, 2011. States receiving these funds have used them to conduct studies on the feasibility of Exchanges, and conduct community forums to hear directly from residents on how Exchanges should be established.
  • Six states and a multi-state consortium led by the University of Massachusetts Medical School received over $241 million in Early Innovator grants to develop model Exchange IT systems. All Early Innovator states have committed to assuring that the technology they develop is reusable and transferable. Using the grants, they will develop the building blocks for Exchange IT systems, providing models for how Exchange IT systems can be created.

The following grantees applied before the March 30, 2011 deadline. Grants were awarded on May 23, 2011.

 North Carolina
North Carolina Department of Insurance
Amount Awarded: $12,396,019
Level of Funding: Level One

Summary: North Carolina will engage stakeholders, prepare analyses of outstanding policy decisions, and expand the existing eligibility system of the North Carolina Department of Health & Human Services to accommodate the Exchange. The state will also: develop requirements for the non-eligibility related Exchange functions to prepare any necessary procurements; prepare North Carolina’s consumer assistance program in anticipation of 2014 requirements; develop a work plan, budget, and evaluation plan for the North Carolina Health Benefit Exchange (NCHBE); develop a post-2014 financial sustainability plan; and support initial operational activities of NCHBE.

West Virginia
West Virginia Offices of the Insurance Commissioner
Amount Awarded: $9,667,694
Level of Funding: Level One

Summary: West Virginia will provide for several consumer quality and effectiveness related studies to ensure an efficient and value driven market transition into the Exchange, including further funding for actuarial services and economic modeling as envisioned under the Planning Exchange Grant. West Virginia will also use funding to: create tools for successful risk adjustment; undertake an Exchange issuer initiative and complete a producer and navigator strategic plan; allow for continued policy integration with constituent state agencies; and, develop a business and operational plan that will ensure financial sustainability by January 2015.

Maryland Department of Health and Mental Hygiene
Amount Awarded: $27,186,749
Level of Funding: Level One

Summary: Maryland will conduct policy development and detailed planning to build on the work of Maryland’s Exchange Planning Grant and Maryland’s Innovator Grant. The Level One Establishment Grant will result in data-driven and intensive policy analysis that will shape the technical and operational infrastructure of the Exchange. In addition, the activities performed with this funding will result in the rapid implementation of the Exchange IT platform, including product licensing, system integration, and independent verification and validation. The IT platform will be flexible to respond to forthcoming federal guidance and ongoing policymaking and input from Maryland stakeholders.