6 states to get HHS grants for setting up online insurance exchange models

Technology developed by "early innovators" will be shared with other states before 2014, when health reform requires exchanges across the country.

By Charles Fiegl — Posted March 4, 2011

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Six states and a New England organization will receive $241 million in "early innovator" grants to develop the technology Americans will use to purchase insurance through exchanges operated by states.

"Beginning in 2014, states will provide private insurance exchanges to pool purchasing power," said Health and Human Services Secretary Kathleen Sebelius. "Exchanges will make finding health insurance much easier by giving people a one-stop shop where they can compare and choose a health plan that's right for them."

Kansas, Maryland, New York, Oklahoma, Oregon, Wisconsin and a multistate consortium of individuals and businesses led by the University of Massachusetts Medical School will share the funds. The groups will build the consumer interfaces and other online technology that individuals will use to access the health insurance exchanges mandated by the national health system reform law.

The grantees will share the technology they develop with the rest of the nation, Sebelius said. Under the reform law, HHS will step in to establish health insurance exchanges in states that do not launch their own by 2014.

HHS chose states of differing demographics and sizes to receive the grants. "This diversity will help ensure that a wide range of [information technology] models are developed, and every state will benefit," the department said.

The remaining states then can select a developed exchange IT model that best fits each of their needs.

In the fall of 2010, 48 states accepted $1 million planning grants to begin preparing for health exchanges. Alaska and Minnesota initially chose not to apply for federal money, but Minnesota's Dept. of Health said in January that it would accept a planning grant.

Alaska is still holding out. Gov. Sean Parnell announced Feb. 17 that his state would not apply for federal money to implement an insurance exchange, citing a recent ruling by a federal judge in Florida that the individual insurance mandate at the heart of the health system reform law is unconstitutional.

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