Insurance exchange establishment grants flow to 8 states

The federal government has stepped up activity to establish health insurance exchanges by awarding new grants to 8 states: California, Connecticut, Hawaii, Iowa, Maryland, Nevada, New York, and Vermont. Health & Human Services Secretary Kathleen Sebelius announced the grant funding on Aug. 23.

Officials see the exchanges as providing consumers and small businesses with access to high-quality, affordable health insurance via an online marketplace where consumers can choose a private health insurance plan that fits their health needs -- and, Sebelius noted, have the same kinds of insurance choices as members of Congress.

“We continue to support states as they move forward building an exchange that works for them,” Sebelius said. “Thanks to the healthcare law [the Affordable Care Act], Americans will have more health insurance choices and the ability to compare insurance plans.”

Via the exchanges, consumers will be able to learn whether they are eligible for tax credits and cost-sharing reductions, or other healthcare programs, such as  the Children’s Health Insurance Program. Small employers will be eligible to receive tax credits for coverage purchased for employees through the exchange.

The intent of the competitive marketplaces, said Sebelius, is to make purchasing health insurance easier and more understandable and to offer consumers and small businesses increased competition and choice.

California, Hawaii, Iowa and New York were awarded Level One Exchange Establishment grants, which provide one year of funding to states that have begun the process of building their exchange. Connecticut, Maryland, Nevada, and Vermont were awarded Level Two Establishment grants, which are provided to states that are further along in building their exchange and offers funding over multiple years.

Previously, 49 states, the District of Columbia and four territories received grants to begin planning their exchanges, Sebelius said. With the most recent awardees, 34 states and the District of Columbia have also received establishment grants to begin building their exchanges.

On June 29, HHS announced a funding opportunity providing states with 10 additional opportunities to apply for funding to establish a state-based exchange, state partnership exchange or prepare state systems for a federally facilitated exchange. States can apply for exchange grants through the end of 2014, and may use funds during the initial start-up year.

A detailed breakdown of each grant award and what each state plans to do with its exchange funding is available here.

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