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Will 16 States Eat PPACA Exchange Construction Dust?

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The U.S. Department of Health and Human Services (HHS) has awarded about $765 million in health insurance exchange construction grants to 8 states.

HHS is giving “Level One” grants, which are supposed to help states that are just starting to build their exchanges, to California, Iowa, Hawaii and New York.

California received $196 million; Iowa, $27 million; Hawaii, $62 million; and New York, $96 million.

The department is giving “Level Two” grants, which are supposed to go to states that already have started setting up exchanges, to Connecticut, Maryland, Nevada and Vermont.

Connecticut received $107 million; Maryland, $123 million; Nevada, $50 million; and Vermont, $104 million.

HHS is handing out the grants to implement the exchange provisions of the Patient Protection and Affordable Care Act of 2010.

PPACA opponents continue to try to block implementation of the law in the courts and in Congress. If the law takes effect on schedule and works as drafters expect, states and HHS will set up exchanges, or Web-based health insurance supermarkets, for the individual and small group markets by 2014.

A state can choose whether to handle all or part of the process of setting up and supervising an exchange, or it can turn all responsibility for setting up an exchange over to HHS.

HHS reports that 49 states, the District of Columbia and 4 territories have received initial exchange planning grants.

The new round of exchange construction grant announcements has increased the number of states receiving construction grants to 34, from 26. The District of Columbia also has received an exchange construction grant, officials say.

The 16 states that have received only the initial planning grants, or no grants, are Alaska, Florida, Georgia, Kansas, Louisiana, Montana, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, Texas, Utah, Virginia, Wisconsin and Wyoming.

In June, HHS said it will be accepting applications for state exchange construction grants up until 2014.

Regulators from some states in which many officials oppose the idea of participating in PPACA have said staying out of the exchange program could backfire, by maximizing HHS control over a state’s local health insurance market. Others have argued that refusing to take the grants is a matter of principle, that the federal government could end up failing to make good on much of the support it has promised to provide for PPACA-related programs, including the exchange system; and that an election victory for Mitt Romney in November could reduce the risk involved with letting HHS be responsible for handling PPACA exchange services.


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