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HHS Awards $49 Million For Health Insurance Exchanges

States will use the grants to build the IT infrastructure for their insurance marketplaces, which, HHS said, will include the same plans members of Congress can purchase.

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The Department of Health and Human Services (HHS) announced Thursday that nearly $49 million will be distributed to 48 states and the District of Columbia to help them plan and establish health insurance exchanges (HIEs).

Starting in 2014, improved choices will be offered through HIEs -- new, competitive, state-run and consumer-centered health insurance marketplaces. The state-based exchanges will require the development of a robust health IT infrastructure that will support secure websites where eligible customers and businesses can compare health plans as well as purchase health insurance coverage.

According to officials at HHS, Americans will have the same healthcare choices as members of Congress who will also purchase coverage through the exchanges. Individuals and families purchasing health insurance through exchanges may also qualify for tax credits and reduced cost-sharing depending on their income.

"Today, too many individuals and small businesses are on their own in dealing with insurance companies. They pay higher costs than Americans who get their insurance through big companies or other large employers because they can't pool their costs or spread the risk," HHS secretary Kathleen Sebelius said in a statement. "That's why the Affordable Care Act helps states create exchanges, so individuals and small businesses can band together, have the same purchasing power as those big employers, and get a fairer deal when it comes to their healthcare. Today, we're providing critical resources to help states take the first step toward creating these competitive marketplaces."

These grants of up to $1 million each will give states the resources they need to conduct the research and planning needed to build a better health insurance marketplace and determine how their exchanges will be operated and governed, including:

-- Assessing current information technology (IT) systems and infrastructure and determining new requirements;

-- Developing partnerships with community organizations to gain public input into the exchange planning process;

-- Planning for consumer call centers to answer questions from their residents;

-- Determining the statutory rules needed to build the exchanges;

-- Hiring key staff and determining ongoing staffing needs;

-- Planning the coordination of eligibility and enrollment systems across Medicaid, the Children's Health Insurance Program (CHIP), and the exchanges;

-- Developing performance metrics, milestones, and ongoing evaluation.

HHS officials also noted that a key part of the Affordable Care Act is the development of HIEs, which will put greater control and choice in the hands of individuals and small businesses. While state exchanges are not required to be operational until 2014, these planning grants will help build the technological and administrative infrastructure that HIEs will need when they begin offering their services to customers.

In July, HHS announced that it allocated $51 million toward the development of HIEs and at that time published a request for comment asking states, consumer advocates, employers, insurers, and other interested stakeholders to provide input as HHS develops the rules and standards exchanges should be required to meet. The deadline for public comment is October 4.

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