HHS Announces Funding Opportunity to Help States Build Exchanges – Say Ahhh! A Children’s Health Policy Blog

Health and Human Services Secretary Kathleen Sebelius has
announced that
states can now apply for grants to “establish” their Health Insurance Exchanges
under the Affordable Care Act. These grants follow the Exchange “planning”
grants awarded last September to 49 states, including DC, and will provide states with
ongoing resources to move beyond planning and begin the process of implementing
their Exchanges. (Heads up Alaska and Minnesota, it’s not too late get in on
the action…HHS also announced another round of planning grants for the two
states that did not apply for Exchange planning grants.)

In announcing the funding opportunity, Secretary Sebelius

 “States are moving forward, implementing the Affordable Care Act and making reform a reality. These grants will help ensure states have the
resources they need to establish exchanges and ensure Americans are no longer
on their own when shopping for insurance.” 

Exchanges, a critical component of health reform, are expected to provide affordable
coverage to an estimated 16 million individuals and employees of small
business, many with tax credits to subsidize premiums. The Exchanges will
enable consumers to compare plans based on price and quality and lower costs by
increasing competition between insurance companies and allowing individuals and
small businesses to band together to purchase insurance.

HHS has designed this funding opportunity with maximum
flexibility for states. States will have multiple opportunities to apply for
funds, and can either apply for multi-year funding or take a step-by-step
approach by applying for annual project grants. Award amounts, sufficient to fulfill
the purposes of the funding opportunity, will vary based on the proposed
activities and specific needs of each state. Funds can be used for a number of
different activities, including consulting with stakeholders, making
legislative and regulatory changes, governing the exchange, establishing
information technology (IT) systems, performing oversight and ensuring program
integrity. The grant opportunity is available on a rolling basis with quarterly
deadlines beginning March 30, 2011. Decisions on grant applications will be
made approximately 45 days after each application due date.

In order to secure ongoing funding, each State must make
progress toward establishing an Exchange, implementing market reforms and
meeting other benchmarks as the Secretary may establish. Benchmarks must be
identified in each of these core areas: background research; stakeholder
involvement; legislative/regulatory action; governance; Exchange IT systems;
program integration; financial management; oversight and program integrity;
health insurance market reforms; providing assistance to individuals and small
businesses, coverage appeals and complaints; and business operations/exchange

Examples of critical benchmarks include evidence of
collaboration between exchanges and state Medicaid agencies or submission of
data collected by the state Consumer Assistance programs regarding problems
consumers encounter and actions taken by the state to resolve them.

It’s good to see IT systems included among the allowable
expenditures. This will be a relief to states that don’t receive one of up to
five Innovator grants (which should be announced soon) for the design of model Exchange IT systems
that can be adopted by other states. And while HHS has proposed complementary
funding for upgrades to Medicaid eligibility systems that would receive 90% federal
support, those funds are not intended to enable the functionality of the
Exchange. The current funding announcement rounds out the opportunity for all
states to finance their Exchange IT systems. The IT component is central to
providing families, individuals and small businesses with consumer-friendly,
web-enabled, paperless access to expanded health coverage options through
Medicaid, CHIP and the Exchange. States are required to submit an IT gap
analysis that describes their current systems and maps out the changes required
to design, build and implement the needed Exchange IT infrastructure.

More information on this funding opportunity is available
in this fact sheet and at www.grants.gov, under CFDA number 93.525.

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