Eight states receive health insurance exchange grants from HHS

Eight states – California, Connecticut, Hawaii, Iowa, Maryland, Nevada, New York and Vermont have all received a new influx of federal funding to build out custom health insurance exchanges. Under federal health care reform rules, states are required to create online marketplaces that will allow consumers to compare insurance rates across local providers. States that choose not to build their own exchanges will have a generic federal one provided for them.

California, Hawaii, Iowa and New York were awarded one-year grants, in order to get their exchanges off the ground. Connecticut, Maryland, Nevada and Vermont received grants that will last for several years, as their projects are further along. 49 states have been awarded feasibility grants which provide funding to begin the planning phase of their exchanges. 34 states have received establishment grants to formally start building out their exchanges. On June 29, HHS announced a funding opportunity that gave states 10 additional opportunities to apply for funding based on their exchange plans.

Awards include – $107 million to Connecticut in an establishment grant to bring on staff in order to get the exchange up and running. New York saw an additional influx of $95.5 million bringing the total level of federal support for the state’s exchange plan to $183.2 million. Vermont was awarded $104.4 million to bring on business and outreach operations for their exchange. California was also awarded a grant, to add to its efforts – the state recently awarded the largest contract in this space so far – $359 million to Accenture to build out its exchange.

In Maryland, which has been working on its exchange since shortly after federal health care reform was passed is one of the farthest along in the process. State officials released the name and logo of its exchange which will be available as of October 2013 under the name Maryland Health Connection. State subsidized plans will be available starting in January 2014. The state was awarded $123 million in this round of funding.

So far, more than $1 billion in federal funding has been provided to states to help them set up their own exchanges by 2013. The deadline is significantly expedited relative to typical government procurement and deployment timelines and some states opted to hold off with planning or building exchanges until the Supreme Court made its ruling this summer. States that opted to do that ran right up against the application deadlines for some federal grant programs.

As CivSource has reported, states like Pennsylvania which originally held off on an exchange tried instead to go forward with their own twists on the requirement. Pennsylvania Governor Tom Corbett proposed a multi-exchange model, and WellPoint announced a privately run exchange that competes with the state exchanges. For states that fail to meet the deadline, or do not have their plans approved, the federal Department of Health and Human Services will create and manage an exchange for them. The federally managed exchanges are expected to be generic, whereas state managed exchanges have more options for customization and control.

“We continue to support states as they move forward building an exchange that works for them,” Secretary Sebelius said in a statement.

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