HHS gives $49M to help states build insurance exchanges

By Mary Mosquera
05:13 PM

The Health & Human Services Department awarded $49 million in grants to 48 states and the District of Columbia to get them started building online health insurance exchanges designed to help consumers shop for coverage. Two states, Minnesota and Alaska, did not apply for the grants, according to HHS officials.

The grants will help states take first steps toward building insurance market exchanges, designed to offer "one-stop shopping" for consumers and small businesses looking to compare and purchase health plans, as called for by the health reform law, said HHS Secretary Kathleen Sebelius in announcing the grants Sept. 30.

The Affordable Care Act authorized the grants to the states to get their exchanges up and running in time for millions of people and small businesses to start using them to pick health plans in 2014.

"We're at the point where we are starting to drill down into the details of what it will take to put up an exchange that improves the value proposition for the consumer at the state level," said Joel Ario, deputy director for the Office of Health Insurance Exchanges in HHS' Office of Consumer Information and Insurance Oversight, in a briefing with reporters.

The grants"up to $1 million for each state"will help them assess technical issues and "set up a system that will make for a simple and streamlined application process on the front end so people will come to the exchanges primarily through the Web portal," Ario said.

States will also establish consumer call centers to answer questions from residents about the exchanges and build partnerships with community organizations in order to encourage the public to participate in exchange plans.

States must also determine how to coordinate eligibility and enrollment systems across Medicaid, the Children's Health Insurance Program (CHIP), and the insurance exchanges.

HHS has work groups advising it on how to establish links between the exchange and state Medicaid programs, Ario said. For example, when people enter information on the front end, HHS is trying to determine how on the backend it will assess who is eligible for Medicaid, who is eligible for an exchange plan with subsidies, and who is eligible for exchange plans without subsidies.

The health reform law requires screening and enrollment to be a seamless process for those using the exchange.

"Behind that are a number of policy decisions on how we do the types of sorting," Ario said. "We are working on that now like crazy because that plays into the IT systems and needs to be moving forward by the beginning of next year."

For their IT requirements, states may acquire new systems for a phased deployment, build on existing systems, such as state Medicaid systems, or use Web services, Ario said.

Some federal agencies will expand their systems to support the exchanges. The health reform law refers to the IRS for verification of income and the Social Security Administration for verification of citizenship.

Earlier this month, HHS accepted recommendations for standards and services from the Health IT Policy committee that will enable states to exchange enrollment and eligibility information of their health and human services programs with the insurance exchanges.

A second round of state grants will follow for the establishment of exchanges in the first half of 2011, Ario said

More information is online.