The Health & Human Services Department announced Friday it would make up to five grant awards to a group of states to design and set up the computer systems and networks necessary for operating state health insurance exchanges called for in the health reform legislation.
The "early innovator" grants would go to individual or clusters of states working on setting up the exchanges, designed to be a single destination where consumers and small businesses could shop for, compare and purchase health insurance plans.
The technology models developed under the "early innovator" grants would then be shared with other states.
HHS has not decided the amounts of the two-year grants, which they will award by Feb. 15. Instead, it will be left to the states to propose an amount depending on the sophistication of their proposed system.
"This will help to create a simpler, consumer-oriented system for individuals, families and businesses to sign up for the health insurance plan that they choose," said Joel Ario, director of health insurance exchanges in HHS' Office of Consumer Information and Insurance Oversight.
The Affordable Care Act authorized the grants to the states to get their exchanges running in time for millions of people and small businesses to start using them to pick health plans in 2014.
Like airline, banking and other consumer e-commerce systems, the insurance exchange systems need to be innovative, cost effective, and easy to use by consumers navigating the welter of qualification and enrollment information necessary for making health insurance choices.
"By encouraging and rewarding states for their innovation, we can build and leverage models that can be adopted and tailored by other states and generate taxpayer savings across the board," Ario said.
Henry Chao, chief information officer of HHS's Office of Consumer Information and Insurance Oversight, said the systems could potentially take many different approaches, including open source, but that it is most important that they excel at exchanging information across various programs and formats.
The project confronts eligibility and enrollment system coordination across Medicaid, the Children's Health Insurance Program (CHIP), and the insurance exchanges, programs that have been historically disconnected.
To that end, HHS earlier this year accepted recommendations by a panel of the Health IT Policy Committee for establishing initial standards and services for exchanging state enrollment and eligibility information.
"The principle here is to create a lot of reuse and to focus on core functions and capabilities," Chao said. "We know states have unique needs in their programs in serving different demographics."
Chao cited the "Connect gateway," developed within the Office of the National Coordinator, as a potential exchange model. Connect was developed by 26 federal agencies to share health information with each other and with private sector organizations and later released to the public in open source.
Chao said that HHS would make sure that the states or follow common rules and standards-based exchange. "We will apply a significant amount of governance in the collaboration to assure that there is uniformity and there are principles that are followed to create data and information interoperability," he said.
In February, all states will be eligible to apply for another set of grants to support deployment of the insurance exchange systems once models have been developed by the early adopter grantees, Ario said.
