The U.S. Department of Health and Human Services (HHS) has allocated a total of about $35 million in health insurance exchange establishment grants to three states – Indiana, Washington State and Rhode Island.

If the Patient Protection and Affordable Care Act of 2010 (PPACA) takes effect as written, it will create a new system of state-supervised health insurance distribution exchanges starting in 2014.

The exchanges are supposed to help individuals and small employers buy subsidized health coverage.

A state can create one exchange or several exchanges, participate in a multi-state exchange, or let the federal government provide exchange services for its people.

Indiana is getting about $6.9 million that the Indiana Family and Social Services Administration can use to set health exchange information systems and pay for project management, legal, actuarial, and financial expertise and general policy support.

Rhode Island is getting $5.2 million for the Rhode Island Department of Business Regulation.

The Rhode Island department can use the grant to pay for information systems and develop a consumer support program.

Washington state is getting $23 million for the Washington State Health Care Authority.

The authority can use the grant to develop policy recommendations and pay for information systems.

The exchange establishment grants are aimed at states that already have completed the early exchange planning process and are starting to set up exchange programs, HHS officials say.

- Allison Bell

Other health insurance exchange coverage from National Underwriter Life & Health: