WASHINGTON (Reuters) - The government on Friday laid out incentives for states and people to participate in health insurance exchanges, including tax credits and funding grants for the states.
The health regulators also clarified how they will decide who is eligible to participate in the exchanges, a key program under President Barack Obama's healthcare overhaul.
The exchanges are envisioned as open marketplaces of competing insurance plans that allow uninsured people and small businesses to band together to negotiate cheaper rates.
In the guidelines released on Friday, the U.S. Health and Human Services and Treasury departments outlined the premium tax credits to help Americans afford private insurance. They also detailed processes to check income and determine eligibility for federal subsidies such as Medicaid, the state insurance program for the poor.
States, insurance companies and patient groups have been awaiting these details because they are critical to establishing the exchanges.
The HHS on Friday also awarded 13 states and the District of Columbia $185 million in grants to help them build the exchanges. Last year, HHS gave $50 million in planning grants to nearly all states and $241 million in "early innovator" grants to help seven states establish exchanges that other local governments could use as a model.
States are facing a deadline of January 1, 2013 to submit detailed plans for how their exchanges will work, or the HHS would come in and do the work to ensure the exchanges are operational by 2014.
HHS and the Treasury department are soliciting comments on the guidelines, which are here: http://r.reuters.com/zut23s.