So far, more than half of all states have taken steps toward building the exchanges.

"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 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.

The three proposed rules released by HHS and Treasury focus on the following:

• Easy, simple access to coverage for consumers and small businesses. New rules will make it easy for consumers to enroll in high-quality health plans and get help paying for health coverage through premium tax credits and cost sharing reductions. Small employers participating in the Small Business Health Options Program will be able to offer their employees a choice of health plans and cut their costs with new tax credits.
• Health insurance premium tax credit. Individuals and families will receive premium tax credits to help defray insurance costs, increasing access to health coverage for middle class American families. The tax credit will be available to those families with incomes between 100 percent and 400 percent of the poverty level ($22,350 – $89,400 for a family of four in 2011). The CBO estimates the average credit will be $5,000 a year once the credit is fully phased in.
• Medicaid. The rule proposes a new Medicaid coverage group that will cover adults with incomes up to 133 percent of the FPL; new federal matching rates that will provide 100 percent federal funding for newly eligible individuals for three years, gradually reduced to 90 percent in 2020; simplifying eligibility by relying on modified adjusted gross income and creating only four categories of eligibles; and creating better coordination across the exchanges, Medicaid, and CHIP. 

In her letter to governors, Sebelius lays out a partnership that will allow states to work with HHS to set up exchanges while making more efficient use of shared resources. The letter asks for comments from states on how the partnership model can build on the flexibility states have when designing an exchange that works for them.

In the weeks ahead, the administration will conduct an aggressive outreach campaign and ask for public comment on the three proposed rules. Everyone is invited to comment. In addition to accepting written public comments for the next 75 days, the departments will hold public forums in the following cities:

• Atlanta, GA
• Chicago, IL
• Denver, CO
• New York, NY
• Portland, OR
• Sacramento, CA

The departments expect to modify the proposed rules issued August 12 based on the feedback received. 

More coverage on health exchanges from BenefitsPro.com

• Health exchanges: Where do brokers fit in?
• HHS unveils health exchange rules
• Living with health exchanges
• Ark. insurance chief to try again on exchange
• NY health exchange bill preserves broker role