WASHNGTON – Indiana has landed a $6.8 million award to help the state continue its work on a health insurance exchange, a key provision of the Affordable Care Act. Also, Washington State has received a $23 million federal grant to create a new health insurance exchange, and Rhode Island announced it has a $5.2 million federal grant to build its exchange.

Centers for Medicare and Medicaid Services (CMS) Administrator Donald Berwick, MD, announced the award on Monday.

[See also: CMS plans insurance database.]

When the Affordable Care Act is fully implemented in 2014, Health Insurance Exchanges will provide individuals and small businesses with a one-stop shop to find and compare affordable, high-quality, private health insurance options, the same options that members of Congress will have, according to Department of Health and Human Services Secretary Kathleen Sebelisus. The exchanges are underpinned by health information technology.

[See also: HHS allots $241M for state insurance exchange IT.]

“I am pleased to announce today that Indiana has taken an important step in providing a better insurance marketplace for Indianans,” said Berwick. “The Exchange Establishment grant announced today will help ensure Indiana has the resources and the flexibility it needs to establish an Exchange, and ensure Indiana’s families are no longer on their own when shopping for insurance.”

Exchanges will bring new transparency to the market so that consumers will be able to compare private health insurance plans based on price and quality, Berwick said. By increasing competition among insurance companies and allowing individuals and small businesses to band together to purchase insurance, exchanges will help lower costs.

Indiana applied for a one-year grant that is designed for states making step-by-step progress on their Exchange. Moving forward, States will have multiple opportunities to apply for funding as they build their Exchanges. This process provides maximum flexibility and ensures that States can move forward on their own timetables.

The funding of $6,895,126 will be provided to the Indiana Family and Social Services Administration to update their information technology systems and provide project management, legal, actuarial, and financial expertise and general policy support.

Indiana will use resources from the Affordable Care Act to strengthen the health information technology systems that will be integral to its exchange. Additional funding will support project management, legal, actuarial, and financial expertise and general policy support.

The Department of Health and Human Services anticipates awarding additional grants to states in the weeks and months ahead. Applications for Exchange Establishment Grants will be taken on a quarterly basis, with the next deadline being June 30th, 2011 and the last deadline being June 29, 2012.