CMS Supports Modernizing Enrollment on State-Based Exchanges

CMS is offering $20 million in grants to states in order to update their state-based exchanges in light of the spike in Affordable Care Act marketplace enrollment.

“Our State-based Marketplaces are the gateway to quality, affordable health care for millions of consumers and these investments will make it even easier to sign up for coverage,” said CMS Administrator Chiquita Brooks-LaSure. 

“This funding available to states will help them to provide consumers with swift eligibility determinations and enrollment into comprehensive health care plans.”

The agency recognized that the swift uptick in Affordable Care Act marketplace enrollment due to the special enrollment period could be overwhelming for states with outdated technological infrastructures. CMS anticipated that states would use this funding to improve their technology systems in order to better handle the enrollment spike.

 As many as 21 cooperative agreement grants will be available to applicants. States that operate their exchanges on the federal health insurance marketplace website may still be eligible to apply.

CMS highlighted that these funds could go towards speeding up the eligibility determination process which assess whether individuals qualify for premium tax credits and cost-sharing reductions.

However, the funds may be used in a wide variety of ways to improve Affordable Care Act marketplace enrollment processes.

States could use the grant money to better align with federal requirements. They could invest it in consumer notifications, enrollee education opportunities which will be even more critical for first-time Affordable Care Act marketplace enrollees who are switching plans mid-year, reporting requirements, oversight, customer service, and more.

“We applaud State-based Marketplaces – many of which have provided opportunities for special enrollment periods during the COVID-19 Public Health Emergency – for their hard work,” said Administrator Brooks-LaSure.

The funds for these grants are considered American Rescue Plan funding. The American Rescue Plan has also covered higher subsidies on the Affordable Care Act marketplace and increased the federal medical assistance percentage (FMAP) for expanded Medicaid programs. 

The deadline to apply for a grant is July 20, 2021 and applicants can expect to hear back from CMS about their applications in early September 2021. The grant period lasts from the day that the grant is awarded in early September 2021 through September 9, 2022.

State-based exchanges are eligible to apply if they are approved at the time of the due date, the Notice of Funding Opportunity clarified. 

States that run their exchanges on the federal marketplace are eligible, but states that have HHS-run exchanges do not qualify for the grant.

“Applicable requirements include implementation of provisions of the ARPA, which increase financial assistance amounts available to certain taxpayers for Plan Years (PY) 2021 and 2022 who enroll in a qualified health plan through an Exchange,” the Notice of Funding Opportunity added.

CMS enumerated 20 states plus the District of Columbia that are eligible for this funding in the Notice of Funding Opportunity. Each grant will be worth approximately $1.3 million.

The announcement comes as enrollment on the Affordable Care Act marketplaces climbs due to the special enrollment period. In the first couple of weeks since the start of the special enrollment period, the federal health insurance marketplace gained 200,000 new enrollees. 

Approximately four months later, the HHS reported that the special enrollment period influx of enrollees had exceeded 1.2 million individuals.

The American Rescue Plan’s increased subsidies are a major factor that attracted more enrollees. Thirty-four percent of all special enrollment period enrollees have access to a plan that could reduce their premium to $10 per month or less.

Prior to the special enrollment period, states already faced a spike in enrollment on the federal health insurance marketplace. During the open enrollment period for 2021, the Affordable Care Act federal health insurance marketplace saw a seven percent increase in enrollment.