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January 21st, 2011
Health and Human Services Dept. Offers New Funding to States to Establish Health Insurance Exchanges for Individuals, Businesses

Washington, D.C.– Health and Human Services (HHS) Secretary Kathleen Sebelius today announced new grants to help states create health insurance exchanges, a key element of the Affordable Care Act. When the law is fully implemented in 2014, an exchange in each state will provide individuals and small businesses in that state with a “one-stop shop” to find and compare affordable, high-quality health insurance options.

The exchanges are expected to bring transparency to the health insurance market, allowing consumers directly to compare various plans based on price and quality. By increasing competition among insurance companies and allowing individuals and small businesses to band together to purchase insurance, the exchanges will likely lower costs nationwide. Small businesses can already apply for tax credits to help cover the cost of insurance.

“Building exchanges will give individuals and companies access to exactly the kind of information you need in a truly free marketplace,” said Rep. Raúl M. Grijalva, who voted against the recent Republican attempt to repeal the Affordable Care Act and spoke against it on the floor of the House. “Arizona and every other state can and should help its people find the information they need to afford good quality health care that’s right for their needs. That’s what the exchanges are about, and that’s what these grants can help accomplish.”

The new grant announcement can be found at by searching for CFDA number 93.525, and the full announcement can be found at

States building their exchanges at a rapid pace can apply for multi-year funding. States taking a slower, step-by-step approach can apply for funding for each project year. Each state will have multiple opportunities to apply for funding as its exchange nears completion.

States can use the newly announced grants for a number of activities, including conducting background research, consulting with stakeholders, making legislative and regulatory changes, governing the exchange, establishing information technology systems, conducting financial management and performing oversight and ensuring program integrity.

Many activities related to the exchanges have been funded by the $49 million in planning grants awarded by HHS in July 2010. States applied to use those grants for a number of important planning activities, including research to understand their insurance markets and taking steps to establishing the exchanges’ governing structures. 

More information can be found at

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