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One Day After Supreme Court Decision, HHS Announces Additional Exchange Funding

Erin Hertzog

Lindsey Murtagh

Melissa Bianchi

02 July 2012

One day after the Supreme Court upheld the Patient Protection and Affordable Care Act (PPACA)—bringing new urgency to state efforts to establish health insurance Exchanges under the law—HHS released a new Funding Opportunity Announcement (FOA) entitled “Cooperative Agreement to Support Establishment of Affordable Care Act’s Health Insurance Exchanges.”  According to HHS’s press release, the Department has already granted $850 million in “Exchange Establishment” grants to 34 states and the District of Columbia, and anticipates making ten more of these grants through the end of 2014—the year that the exchanges must be fully operational.  Notably, publication of the new FOA does not impact those agreements that have already been awarded and funding is available to States regardless of whether they have already received an Establishment award (although a State may not apply to fund a specific activity that is already supported by another award).

Exchange Establishment grants generally fall into two categories:  Level One and Level Two.  Level One Establishment grants are open to States that received federal funding for Exchange Planning activities and awardees of the Cooperative Agreements to Support Innovative Exchange Information Technology Systems. This includes both States that are establishing a State-based Exchange, and those participating in the Federally-facilitated Exchange or Exchange Partnership Model.  However, Level Two Establishment grants are only open to States that have the legal authority to establish a State-based Exchange.  In an effort to promote flexibility, HHS will allow States to initially apply under the new FOA for either Level One or Level Two Establishment grants, and to transition between different Exchange models while maintaining their funding.

Grant funds under the new FOA will be available for those activities integral to establishing an Exchange, which HHS defines to include:

1. Legal Authority and Governance

2. Consumer and Stakeholder Engagement and Support

3. Eligibility and Enrollment

4. Plan Management

5. Risk Adjustment, and Reinsurance

6. Small Business Health Options Program

7. Organization and Human Resources

8. Finance and Accounting

9. Technology

10. Privacy and Security

11. Oversight, Monitoring, and Reporting

12. Contracting, Outsourcing, and Agreements

13. State Partnership Exchange Activities

According to the new FOA, HHS will work with States in establishing processes for Exchanges.  As a part of this collaboration, this grant opportunity will require that States meet certain periodic reporting requirements, and consult regularly with HHS.

Additional information on this FOA is available at grants.gov.  HHS also released an FAQ regarding this funding announcement.

Erin Hertzog

Lindsey Murtagh

Melissa Bianchi

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