The U.S. Department of Health and Human Services (HHS) has announced $1.5 billion in new grants for 11 states to continue building their insurance exchanges. The grants will be given to California, Delaware, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, and Vermont to ensure these states have the resources necessary to build a marketplace that meets the needs of their residents.

“These states are working to implement the health care law and we continue to support them as they build new affordable insurance marketplaces,” HHS Secretary Kathleen Sebelius said in a statement. “Starting in 2014, Americans in all states will have access to quality, affordable health insurance and these grants are helping to make that a reality.”

Because of the Affordable Care Act, consumers and small businesses will have access to marketplaces starting in 2014. The marketplaces are one-stop shops that will provide access to quality, affordable private health insurance choices similar to those offered to members of Congress.  Consumers in every state will be able to buy insurance from qualified health plans directly through these marketplaces and may be eligible for tax credits to help pay for their health insurance.  These marketplaces promote competition among insurance providers and offer consumers more choices.

The exchange establishment grants recognize that states are making progress toward establishing exchanges but are doing so at different paces. States can choose when to apply for grant funding based on their needs and planned expenditures.  States that are moving ahead on a faster pace can apply for multi-year funding, known as level two establishment grants.  States that are making progress in establishing exchanges through a step-by-step approach can apply for funding for each project year, known as level one establishment grants. Delaware, Iowa, Michigan, Minnesota, North Carolina, and Vermont received awards on Jan. 17 for level one grants; California, Kentucky, Massachusetts, New York, and Oregon received level two grants.

A total of 49 states, the District of Columbia, and four territories have received grants to plan their marketplaces, and 34 states and the District of Columbia have received grants to build their marketplaces.  To ensure states have the support and time they need to build a marketplace, states may apply for grants through the end of 2014 and may use funds through their start-up year.