HHS Exchange Funding Tops $1B

May 17, 2012 article on HealthLeaders Media.com

The Department of Health and Human Services on Wednesday announced the award of $181 million in new grants to help states establish health insurance exchanges. HHS also issued two guidance documents to help states build exchanges.

Illinois, Nevada, Oregon, South Dakota, and Tennessee received Level One exchange establishment grants, which provide one year of funding to states that have begun the process of building their exchange.

Washington became only the second state to be awarded a Level Two establishment grant, which offers funding over multiple years to states that are further along in building their HIX. Rhode Island was the first state to receive a Level Two grant.

At the press conference announcing the grants and guidance materials, HHS Secretary Kathleen Sebelius noted that the grants enable states to “go at their own pace” as they set up exchanges.

All totaled, HHS has awarded an estimated $1.2 billion in exchange grants since 2010:

  • Planning grants to 49 states and the District of Columbia totaling more than $54 million,
  • Early innovator grants to seven states totaling more than $249 million, and
  • Establishment grants to 34 states and the District of Columbia totaling more than $856 million

States may apply for exchange grants through 2014 and may use the funds through 2015. However, exchanges are expected to be up and running on Jan. 1, 2014.

HIX remains a political hot potato for some states. Only 11 states have enacted legislation to establish an exchange. Kansas, Louisiana, and Kansas officially returned their funding and their grants were closed out.

Last week, New Jersey Governor Chris Christie vetoed legislation that would have established a state exchange.  “Because it is not known whether the Affordable Care Act will remain, in whole or in part, it would be imprudent for New Jersey to create an exchange at this moment in time before critical threshold issues are decided with finality by the court,” the Republican governor explained.

The guidance documents released provide information about what HIX will look like in 2014 and how to navigate the process. States can run their own HIX or elect to partner with HHS. The Exchange Blueprint includes a detailed explanation of the activities that HIX will perform and the information that states will need to submit to get their exchange or partnership approved to operate in 2014.

A second document outlines how the federally facilitated exchanges or partnerships will operate and how HHS and states will partner in an exchange. In a partnership exchange states can elect to handle plan management and in-person consumer assistance or leave those activities to HHS.

Plan management includes ensuring that health insurance companies are certified, have an adequate provider network, and offer the required essential benefits package. Consumer assistance includes enrollment activities.

Exchange applications should be submitted by mid-November 2012. HHS will review and approve or conditionally approve the applications by Jan. 1, 2013.