Creating a New Competitive Marketplace

Today, HHS awarded  three grants to help States continue their work to implement a key provision of the Affordable Care Act – Health Insurance Exchanges. 

When the Affordable Care Act is fully implemented in 2014, Health Insurance Exchanges will provide individuals and small businesses with an insurance marketplace. This “one-stop shop” will help consumers find and compare affordable, high-quality health insurance options.Exchanges will bring new transparency to the market so that consumers will be able to compare plans based on price and quality, and will offer all Americans the same insurance choices members of Congress will have.  By increasing competition among insurance companies and allowing individuals and small businesses to band together to purchase insurance, Exchanges may even lower costs.

Today, we are taking an important step forward in creating this better insurance marketplace, by awarding “Exchange Establishment Grants” to Indiana, Washington and Rhode Island. These grants will help ensure these States have the resources and the flexibility they need to establish Exchanges, and ensure that Americans are no longer on their own when shopping for insurance.

States can use the Exchange Establishment grants for a number of different activities including:

• Conducting background research
• Consulting with stakeholders
• Making legislative and regulatory changes
• Governing the Exchange
• Establishing information technology systems
• Conducting financial management
• Performing oversight
• Ensuring program integrity.

Today’s announcement marks the first of six rounds of Exchange Establishment grant awards, and the third phase of significant funding for State-based Health Insurance Exchanges.  For more on today’s establishment grant awards, visit our Establishment Grant Awards List here.

Throughout 2010 and 2011, HHS awarded State Planning and Establishment grants to 49 States and the District of Columbia to plan for the establishment of these Health Insurance Exchanges. Under these grants, states have already made progress by conducting studies to determine the most effective way to build an Exchange. For more on planning grant awards, visit our Planning Grant Awards List here.

Moving forward, States will have multiple opportunities to apply for funding as they progress through Exchange establishment. This process gives States maximum flexibility and ensures that States can move forward on their own timetables as they work to build an Exchange.

Applications for the second round of Exchange Establishment Grants are due on June 30th, 2011. You can find more details on the multiple opportunities available to States by looking at the Funding Opportunity Announcement, or by searching for CFDA number 93.525 at www.Grants.gov. You can also view our factsheet on the funding opportunity announcement here.