On Thursday, HHS Secretary Kathleen Sebelius announced that the agency awarded about $1 million each to 48 states and the District of Columbia to begin designing online health insurance exchanges and for plans to study the readiness of IT systems and infrastructure, Healthcare IT News reports (Monegain, Healthcare IT News, 9/30).
Background on Exchanges
Under the health reform law, states by January 2014 must create insurance exchanges that provide coverage options for individuals and small businesses. States can choose to administer their own exchanges -- for which they must have some infrastructure in place by January 2013 -- or ask the federal government to run the exchanges for them.
Currently, only Massachusetts and Utah run health insurance exchanges, and most states have only just begun to build or explore building the necessary infrastructure for the exchanges, according to the Los Angeles Times (Levey, Los Angeles Times, 9/30).
Use of the Funding
The grants will be used, in part, to determine the capabilities and gaps in a state's existing information systems (Goedert, Health Data Management, 9/30).
Joel Ario -- deputy director of the HHS Office of Health Insurance Exchanges -- said the funds will help states develop a Web platform that is easy for consumers to use. He added that states may have to set up new IT systems to figure out when applicants qualify for subsidies or programs such as Medicaid (Mosquera, Government Health IT, 9/30).
HHS stipulated that the grants also can be used to:
- Assess a state's IT systems and delineate new requirements;
- Work with community organizations to include the public in the planning process;
- Plan consumer call centers;
- Hire staff and determine staffing needs;
- Plan coordination between the exchange and Medicaid and the Children's Health Insurance Program; and
- Establish performance benchmarks.
HHS officials said the grants are only the first round of funding for the state health insurance exchanges (CQ HealthBeat, 9/30).
According to Ario, the grants do not indicate that all 48 states will set up their own exchanges but rather that they are exploring the feasibility of doing so (Pecquet, "Healthwatch," The Hill, 9/30).
Two States Reject Grants
Two states -- Alaska and Minnesota -- declined to receive the exchange grants, The Hill's "Healthwatch" reports ("Healthwatch," The Hill, 9/30).
Alaska turned down the funds because it currently is involved in a 20-state lawsuit over the reform law's individual mandate, Politico's "Pulse" reports. However, Alaska Insurance Director Linda Hall said that the state still is considering creating a health insurance exchange (Haberkorn/Kliff, "Pulse," Politico, 10/1).
Minnesota refused the grant after Gov. Tim Pawlenty (R) issued an executive order forbidding state officials to apply for federal health grants (Los Angeles Times, 9/30).