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October 2010 St@teside

Insurance Exchange Planning Grants Awarded to Most States

On September 30, 2010, the U.S. Department of Health and Human Services (HHS) awarded grants to 48 states and the District of Columbia to help them plan for the establishment of health insurance exchanges.  Alaska and Minnesota did not apply for the funding. The vast majority of states that did apply were awarded the full $1 million, with Wyoming receiving $800,000 and a handful of other states receiving just under $1 million (Arizona, Colorado, Connecticut, Louisiana, Maryland, Michigan, Washington, and Wisconsin).

The planning grants are designed to provide resources to states as they undertake the necessary analysis to determine whether they will run their own exchange, partner with other states for a regional exchange, or have the federal government oversee their exchange. These grants will also be used by states to help determine the policy goals for an exchange as well as begin to understand the operational aspects of setting up and running an exchange. Exchanges must be operational on January 1, 2014, and states must have a plan for their exchange on January 1, 2013; the fallback position is that the federal government will be responsible for running an exchange for any state without one.

An overview of grant awards indicates that most states plan to use the funding to undertake several key activities, including:
  • Conduct an analysis of the state’s current health insurance market and uninsured population;
  • Undertake economic and actuarial modeling to assess how the exchange will impact the health insurance market;
  • Examine the pros and cons of running a statewide exchange, joining a regional exchange, or allowing the federal government to administer the exchange;
  • Establish a stakeholder process to ensure input from various affected groups;
  • Draft legislation to enable an exchange; and
  • Address governance, implementation, and operational structures of the exchange.

More information is available on HHS’s Office of Consumer Information and Insurance Oversight’s website.