The Department of Health and Human Services will provide competitive funding for states to design and implement the information technology infrastructure needed to operate health insurance exchanges.
HHS announced the competitive "Early Innovator" grants on Oct. 29.
The exchanges represent new competitive insurance marketplaces where individuals and small businesses will be able to purchase private health insurance starting in 2014. A strong IT infrastructure will be critical to their success, according to federal officials.
For the first time, funding will be directed to states that are willing and able to lead the race to develop IT systems. The systems can then be used as models by all states as they establish the insurance exchanges.
By providing a place for one-stop shopping, the exchanges will make purchasing health insurance easier and more understandable, say federal officials. Similar to any consumer-based industry such as the airline or banking industries, sophisticated, consumer-friendly IT infrastructure will be critical to the success of the exchanges.
Although exchanges are not scheduled to launch until 2014, work is already under way to design and implement them across the country. As states prepare, they have requested early funding assistance to develop the right IT, particularly with respect to eligibility and enrollment systems.
The "Early Innovators" grants will reward states that demonstrate leadership in developing cutting-edge and cost effective consumer-based technologies and models for insurance eligibility and enrollment for exchanges, said HHS Secretary Kathleen Sebelius. All states also will be eligible to apply for a future funding opportunity that will support ongoing exchange implementation.
"States are focused on implementing the health insurance exchanges because they know the exchanges will empower their citizens by forcing health insurers to compete," said Sebelius. "Consumer-friendly information technology is the backbone of that effort which is why we are creating an incentive for states that are willing and able to lead the way to do so."
Two-year grants will be awarded by Feb. 15, 2011, to as many as five states or coalitions of states that have ambitious yet achievable proposals that can yield IT models and best practices that will benefit all states, Sebelius said.
"States are developing cutting-edge innovative systems to deliver cost-effective and consumer friendly care to families and small businesses," said Joel Ario, director of the Office of Consumer Information and Insurance Oversight, Office of Health Insurance Exchanges. "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."
