HHS awards $1.5 billion for exchanges

The federal health department Thursday announced $1.5 billion in new grants to support states building health insurance exchanges under the Patient Protection and Affordable Care Act.

California, Delaware, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon and Vermont all received funding—either one-year or two-year grants, depending on their progress on building the exchanges, the Department of Health and Human Services said.

“These states are working to implement the health care law and we continue to support them as they build new affordable insurance marketplaces,” HHS Secretary Kathleen Sebelius said in a statement. “Starting in 2014, Americans in all states will have access to quality, affordable health insurance and these grants are helping to make that a reality.”

Exchanges—or marketplaces—are a central component of President Obama’s health reform law. They offer consumers an online one-stop shop to shop for their health insurance. Failure to purchase health insurance will result in a penalty beginning next year.

[Also read: Feds begin marketing push for exchanges]

A total of 49 states, the District of Columbia, and four territories have received grants to plan their marketplaces, and 34 states and the District of Columbia have received grants to build their marketplaces, according to HHS.

Though initially states were supposed to have already notified the government about their decision to run exchanges or defer to the government, officials have extended deadlines, as some governors have expressed their dissatisfaction with a lack of guidance on how to do so.

“To ensure states have the support and time they need to build a marketplace, states may apply for grants through the end of 2014 and may use funds through their start-up year,” the department said Thursday.

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