(This article has been updated with a correction.)
The CMS has awarded $187 million to five states for development of state-based exchanges.
The bulk of that money, nearly $100 million, is going to Arkansas, the only state that is actively working to establish its own marketplace. Arkansas plans to have a small-business exchange operational in 2016 and plans to implement an individual exchange the following year.
The other four states receiving grants—Connecticut, Massachusetts, New York and Rhode Island—are among the 16 states and the District of Columbia that have already established their own exchanges. Those states have received more than $3 billion in grants to establish exchanges as authorized under the Patient Protection and Affordable Care Act.
New York received $64 million in the latest round to “support additional development that is needed to implement upgrades to further enhance the consumers shopping experience, support the open-enrollment period in 2015, and continue ensuring program compliance.”
Massachusetts and Connecticut each received nearly $10 million in the latest round of grants, while Rhode Island was awarded roughly $3 million.
The Affordable Care Act requires that state-based marketplaces be “self-sustaining beginning on Jan. 1, 2015.” But many states will continue to rely on federal grant dollars to pay for operations next year as they struggle to find viable long-term funding mechanisms.
During a hearing last week before the House Committee on Oversight and Government Reform, Rep. James Lankford (R-Okla.) pressed CMS Administrator Marilyn Tavenner on whether allowing federal dollars to be used beyond 2014 was contrary to the law.
“The law says they have to be self-sufficient by Jan. 1, 2015,” Lankford said. “If the grant is given to them and those dollars can be used after Jan. 1, 2015, that's contrary to the law.”
Tavenner refused to say whether grant dollars would be utilized by state-based exchanges in 2015. “Most of them are dependent on their user fees and some other sources of revenue,” she said. “That will carry them through '15, but we will be having ongoing discussions with some of the smaller states.”
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(This article has been updated to indicate that the grants were not the final round for the year.)