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HHS, Treasury Take Steps to Help States Build Affordable Insurance Exchanges

August 12, 2011

The Departments of Health and Human Services and Treasury today took the next steps to establish Affordable Insurance Exchanges – one-stop marketplaces where consumers can choose a private health insurance plan that fits their health needs and have the same kind of insurance choices as members of Congress. Among other policies, the proposed rules describe how middle-class families will gain access to unprecedented tax relief that will dramatically reduce the cost of coverage.

Since President Obama signed the Affordable Care Act on March 23, 2010, over half of states have taken actions to build an Exchange. Today, HHS awarded $185 million to 13 states and the District of Columbia to help them build Affordable Insurance Exchanges and, with Treasury, posted three proposed rules that will provide a simple, streamlined, and affordable path for consumers to use the Exchanges to purchase private health insurance. Additionally, HHS Secretary Kathleen Sebelius sent a letter to governors laying out options and resources available to states to set up their Exchanges.

“Too many American families have been priced out or locked out of the health insurance market. Exchanges will give them control and could save them thousands of dollars a year,” said Secretary Sebelius. “I am encouraged by the progress states have made to date and am excited to give them more resources to continue their work.”

“Today we’re laying the foundation to provide tax incentives to help working families purchase health insurance,” said Treasury Secretary Tim Geithner. “This new tax credit brings us a big step closer to achieving one of the signature goals of the Affordable Care Act – to provide tens of millions of Americans with access to affordable health insurance coverage.”

The Affordable Care Act creates Affordable Insurance Exchanges that will allow eligible individuals, families, and small businesses to shop for coverage starting in 2014. More than half the states have already taken action to begin building an Exchange and the new grant awards will accelerate that progress. The Exchange Establishment grants awarded today build on earlier investments in states. In 2010, HHS awarded 49 states and the District of Columbia $50 million to begin planning their Exchanges. HHS expects to make more grant awards in coming months.

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