Most states have at least started thinking about what their health insurance exchanges might look like.

Steve Larsen, director of the Center for Consumer Information and Insurance Oversight (CCIIO), an arm of the U.S. Department of Health and Human Services (HHS), gave that assessment today during a hearing on implementation of the Patient Protection and Affordable Care Act of 2010 (PPACA) that was organized by the health subcommittee of the House Energy and Commerce Committee.

PPACA calls for states to develop health insurance exchange coverage distribution programs by 2014.

Individuals and small groups are supposed to be able to use the exchanges to buy subsidized coverage.

HHS already has provided exchange planning and establishment grants to 49 states, 4 territories and the District of Columbia, Larsen said.

States are now competing for “Early Innovator” awards. Those grants will help states develop exchange information technology systems, Larsen said.

Indiana, Rhode Island and Washington state are getting grants to help with actually setting up the exchanges, Larsen said.

Some states are forming exchange planning boards and holding community outreach meetings, Larsen said.

Other PPACA consequences coverage from National Underwriter Life & Health: