The states that are getting money to establish insurance exchanges and also suing are: Alabama, Arizona, Idaho, Iowa, Maine, Michigan and Nebraska. Three other health reform-opposing states — Indiana, Mississippi and Nevada — previously received funding.

Delaware, Hawaii, New Mexico, Rhode Island, Tennessee, and Vermont are also now on the list for funding.

The agency says 49 states and the District of Columbia have already received planning grants, and 45 states have consulted with consumer advocates and insurance companies. Thirteen states have passed legislation to create an exchange. 

Exchange implementation is required under the Patient Protection and Affordable Care Act. But if a state takes grant money, that doesn't mean it has to follow through with exchange creation. However, if a state doesn't set up an exchange, the federal government will step in to create one.

HHS also has released a list of frequently asked questions to help provide answers to key questions that states need to know in order to set up exchanges. According to HHS, two critical facts to know are that states running health exchanges have more options than originally proposed when it comes to determining eligibility for tax credits and Medicaid. And states have more time to apply for "Level One" exchange grants.

Depending on their health insurance exchange creation progress, states can apply for "Level One" or "Level Two" establishment grants. A Level One grant provides one year of funding to states that have already made progress on their exchange. A Level Two grant provides multi-year funding to states that are further along in their progress.

There are several cut-off dates for grant applications. HHS decided to extend the last cut-off date for Level One funding, which is now June 29, 2012, instead of the original Dec. 30, 2011 deadline. That's also the last day states can apply for Level Two funding.  

"We are committed to giving states the flexibility to implement the Affordable Care Act in the way that works for them," HHS Secretary Kathleen Sebelius said.  "Exchanges will give consumers more choices and make it easy to compare and shop for insurance plans."

According to the Associated Press, states are "all over the place" in their preparations for the health overhaul.

"Some are on the sidelines, waiting for the Supreme Court to rule. Others, like California, are forging ahead to set up their exchanges," writes AP staff writer Ricardo Alonso-Zaldivar. "Vermont even wants to run a statewide single-payer system loosely modeled on Canada's. Many have made varying degrees of progress. In most states, pivotal health care decisions will be made in next year's legislative sessions."

For a list of Frequently Asked Questions on health insurance exchange implementation, click here.

For more information on Affordable Insurance Exchanges, visit http://www.HealthCare.gov/law/features/choices/exchanges/index.html

For more information on the states receiving grants, visit http://www.healthcare.gov/news/factsheets/2011/05/exchanges05232011a.html