Creating a New Competitive Marketplace: Affordable Insurance Exchanges

In 2014, individuals and employees of small businesses will have access to affordable coverage through a new competitive private health insurance market – State-based Affordable Insurance Exchanges. Affordable Insurance Exchanges will provide individuals and small businesses with a “one-stop shop” to find and compare affordable, quality private health insurance options. Exchanges will bring new transparency to the market so that Americans will be able to compare plans based on price and quality. By increasing competition between insurance companies and allowing individuals and small businesses to band together to purchase insurance, Exchanges will help lower costs.

States across the country have received grants to establish an Affordable Insurance Exchange. Use the map below to learn more about Exchange Establishment grants in your state:

Affordable Insurance Exchange Grants

The Exchange Establishment grants recognize that States are making progress toward establishing Exchanges but are doing so at different paces. States can choose when to apply for grant funding based on their needs and planned expenditures.  States that are moving ahead on a faster pace can apply for multi-year funding, known as level two establishment grants.  States that are making progress in establishing Exchanges through a step-by-step approach can apply for funding for each project year, known as level one establishment grants. 

States may initially apply for either level one or level two establishment grants, based on their progress.  State can also choose when during this year to apply for grant funding based on their needs and planned expenditures. States will have multiple opportunities to apply for funding in the years ahead, including opportunities to apply for multiple level one grants as the planning process develops. As indicated in a November 29, 2011 Question and Answer document, CMS intends to award Exchange Establishment grants through 2014. This process gives States maximum flexibility and ensures that States can move forward on their own timetables as they work to build an Exchange.

Each State’s insurance market is unique, and each State will require different levels of support as it creates an Exchange. Each State’s grant awards were made following a thorough examination of funding requested by the State, and an analysis of what would be a reasonable funding amount from the federal government:

• Forty-nine States and the District of Columbia received up to $1 million in Exchange Planning Grants. Four territories received similar grants on March 21, 2011. States receiving these funds have used them to conduct studies on the feasibility of Exchanges, and conduct community forums to hear directly from residents on how Exchanges should be established.
• Six states and a multi-state consortium led by the University of Massachusetts Medical School received over $241 million in Early Innovator grants to develop model Exchange IT systems. Early Innovator states have committed to assuring that the technology they develop is reusable and transferable to other States. Using the grants, they will develop the building blocks for Exchange IT systems, providing models for how Exchange IT systems can be created.