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CMS' Effort to Make Health Insurance More Transparent, Grants $229 Million

Ernie Shannon's picture

Ten states will receive $229 million in federal grant money to establish health insurance exchanges this year and the Department of Health and Human Services (HHS) is promising additional relief when hundreds of thousands more people become eligible for Medicaid in 2014.

This double whammy of mandated actions levied by the Affordable Care Act on states, building the exchanges and absorbing larger numbers of Medicaid recipients, comes at a time when many states are already swimming in red ink. The grant dollars are targeted to cushion some of the cost of setting up an exchange or health insurance marketplace as it is sometimes called. And the federal government is offering to allow states to undertake experimental, pilot or demonstration projects to run all or parts of their Medicaid programs in ways that would not otherwise be consistent with federal rules.

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“We’re taking important actions that will give states more resources and more flexibility and ensure transparency thanks to the Affordable Care Act,” said HHS Secretary Kathleen Sebelius. “All Americans will have access to quality, affordable health care once the Affordable Care Act is fully implemented and today’s steps are important measures that ensure that States have the help they need to administer their Medicaid programs and oversee their insurance markets while assuring meaningful input for consumers and beneficiaries.”

The exchanges are what HHS calls “one-stop” marketplaces for health insurance. Individuals who have no health insurance can visit an exchange and purchase coverage. However, many states have been slow to proceed with development of the exchanges while awaiting the Supreme Court’s decision regarding the constitutionality of the health reform law before proceeding. In an effort to push those states into action, the government is awarding grant money amounting to several million dollars each. To date, 34 states have received the grants including the ten announced today: Arkansas, Colorado, Kentucky, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania, and Tennessee.

A more pressing problem for states in regards to the Affordable Care Act is the fact that Medicaid will expand its roles to include everyone under 65 years of age with incomes below 133 percent of the federal poverty level ($14,500 for an individual and $29,700 for a family of four in 2011). While HHS is allowing states flexibility in managing their Medicaid programs, the agency is requiring “transparency” at each stage of the experimental, pilot or demonstration project. Transparency and public input, the agency said, help to ensure that the changes in Medicaid programs that states contemplate will be adequately reviewed at the federal level.

Finally, HHS is teaming with the Department of Treasury to finalize a rule providing more flexibility to states to find the health care solutions that work best for them, the federal agencies said. The new rules would extend State Innovation Waivers so “they may pursue their own innovative strategies to ensure their residents have access to high quality, affordable health insurance.”