August 16, 2011

States Get $185 Million to Build Insurance Exchanges

Under the Affordable Care Act, more than half the states have started to construct exchanges

The U.S. Department of Health and Human Services (HHS) awarded $185 million to 13 states and the District of Columbia on Aug. 12 to help them build Affordable Insurance Exchanges—one stop marketplaces that allow consumers to choose a private health insurance plan that mirrors insurance choices offered to members of Congress.

Since President Barack Obama signed the Affordable Care Act in March 2010, more than half of the states have taken action to build insurance exchanges. The act creates Affordable Insurance Exchanges that will allow eligible individuals, families, and small businesses to shop for coverage starting in 2014.

In 2010, HHS awarded 49 states and the District of Columbia $50 million to begin planning their Exchanges. HHS expects to make more grant awards in coming months.

HHS Secretary Kathleen Sebelius sent a letter to governors the same day laying out options and resources available to states to set up exchanges. “Too many American families have been priced out or locked out of the health insurance market. Exchanges will give them control and could save them thousands of dollars a year,” said Sebelius, in a statement. “I am encouraged by the progress states have made to date and am excited to give them more resources to continue their work.”

The U.S. Treasury Department and HHS also released on Aug. 12 three proposed rules that they say will provide a simple, streamlined, and affordable path for consumers to use the exchanges to purchase private health insurance.

The three proposed rules released by HHS and Treasury focus on the following:

  • Easy, Simple Access to Coverage for Consumers and Small Businesses: New rules will make it easy for consumers to enroll in high-quality health plans and get help paying for health coverage through premium tax credits and cost-sharing reductions.  Small employers participating in the Small Business Health Options Program will be able to offer their employees a choice of health plans and cut their costs with new tax credits.
  • Health Insurance Premium Tax Credit: Individuals and families will receive premium tax credits to help defray insurance costs, increasing access to health coverage for millions of middle class American families.
  • Medicaid Eligibility: Coordinating the Exchange with Medicaid and Children’s Health Insurance Program eligibility will make enrollment seamless for qualified Americans and reduce the administrative burden on States.

In the weeks ahead, Treasury noted that the administration will conduct an “aggressive outreach campaign” asking for public comment on the three proposed rules from employers, consumers, state leaders, health care providers and insurers.

In addition to accepting written public comments for the next 75 days, the forums will be held so consumers can share their views about the exchanges. Forums will be held in:

  • Atlanta
  • Chicago
  • Denver
  • New York
  • Portland, Ore.
  • Sacramento, Calif.
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