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HHS Awards a Quarter-Billion Dollars More for Exchange Grants

By John Reichard, CQ HealthBeat Editor

September 27, 2012 -- Health and Human Services officials recently announced $224 million in grants to five states and the District of Columbia to fund development of insurance exchanges or exchange-related operations.

Each of the entities except one—Arkansas—has notified HHS that they intend to operate their own exchange to offer coverage options to uninsured Americans and small businesses under the health care law (PL 111-148, PL 111-152).

The awards bring to $2.2 billion the amount of money HHS has granted to states under the health care law for exchanges.

Arkansas is getting $18.6 million. It's partnering with HHS to offer state residents coverage through the exchange to be run by the federal government—called the "federally facilitated exchange," or the FFE.

Under the new grant, Arkansas will be responsible for certifying health care plans sold in the state through the FFE. The state will upload the plans to the FFE in time for the first open enrollment period under the health care law, which begins Oct. 1, 2013.

Arkansas will run the "Arkansas In-Person Assister Program" to help consumers understand, compare and enroll in plans. HHS will manage the website and the consumer hotline. The Arkansas money also will pay for an outreach and education program to encourage enrollment in the federal exchange.

Arkansas Gov. Mike Beebe, a Democrat, recently became the first southern governor to endorse the Medicaid expansion under the law, according to a Sept. 25 Associated Press report.

Other awards are going to:

  • The District of Columbia will receive $72.9 million to hire staff and consultants to manage the creation of its exchange and its first year of operations. The exchange is expected to serve 225,000 District residents. "A substantial portion of the funding will be used to develop an IT system," an HHS grant summary said.
  • The Colorado Health Benefit Exchange will receive $43.5 million "to meet deadlines for [plan] certification, testing and deployment of systems, and operations."

Sen. Michael Bennet, D-Colo., said in a written statement that "hundreds of thousands of Coloradans who now don't have insurance or who have insurance in the unstable, high-cost individual market will have a range of more affordable options through the new exchange."

  • Massachusetts will get $41.7 million to help update its existing exchange to one compatible with the health care law. Much of the money will go to "build a single, integrated, real-time" system to determine eligibility for Medicaid or federal subsidies to buy private coverage. The money also goes to develop a "robust risk-adjustment program" to shift money from plans with higher-cost, sicker enrollees to those with healthier, low-cost members.
  • Minnesota will get $42.5 million to develop broker and consumer assistance services related to its exchange; test measures to assess the cost and quality of plans to help consumers make comparisons; and assess the security of IT systems, among other functions.
  • Kentucky will receive $4.4 million for, among other things, developing a consumer assistance program.

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