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FEB. 22, 2012

State insurance exchange awarded $11.6 million to adjust to Affordable Care Act

Massachusetts will receive $11.6 million from the Centers for Medicare & Medicaid Services to move the state’s online health insurance marketplace for individuals and small businesses toward compliance under the Affordable Care Act, the federal agency announced today.

All states are required to create an insurance marketplace, or an exchange, by 2014 or the federal government will create one for them. Massachusetts, which launched its exchange in 2006, has a leg up. But the Massachusetts Health Connector, which runs the program here, has work to do adjust the state exchange to meet federal requirements, said Executive Director Glen Shor.

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“We need to simultaneously continue to run these programs well and keep our population highly insured, and at the same time we need to plan for 2014,” Shor said. “These resources allow us to do both well.”

In all, 10 states were awarded $229 million yesterday, bringing to 33 the total number of states that have received “establishment grants,” a step above planning grants.

Health and Human Service Secretary Kathleen Sebelius said during a press call this afternoon that states are moving at their own pace in developing insurance exchanges but are making “impressive progress.”

Shor said Massachusetts’s money will be used to prepare for the launch of the “Health Connector 2.0.” The Connector uses a three-tier system to classify health plans by cost and level of benefits. Under the federal law, it must convert to a five-tier system, including the most basic catastrophic coverage.

Connector staff also will be working with other state agencies to create policies that allow health plans to better predict their risk in insuring new patients under the Affordable Care Act, said Kaitlyn Kenney, director of policy and research and coordinator of national health care reform at the Connector.

The grant money will be used for both of those efforts and, Shor said, for educational campaigns to inform state residents about changes under the federal law.

Chelsea Conaboy can be reached at cconaboy@boston.com. Follow her on Twitter @cconaboy.
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