HHS awards $220 million in healthcare implementation grants

Exchanges are supposed to be up and running in each state by Jan. 1, 2014, and HHS is authorized to step in with a federal fallback in the states that don't establish their own.

HHS has bent over backward to get states to take on exchanges themselves, arguing that the new marketplaces should be tailored to the unique needs of each state's insurance market. Even some states that want to set up their own exchanges simply won't be ready by 2014, and HHS has said it will help handle part of the workload to get those states' exchanges off the ground.

Exchanges will function as one-stop portals where individuals and small businesses can compare and purchase insurance, usually with help from a federal subsidy. Plans sold through an exchange must meet certain requirements, and states have the option to add tougher standards of their own.

Arkansas, Colorado, Kentucky, Massachusetts and Minnesota received one-year grants Thursday to help begin building an exchange. Washington, D.C., received a different type of award, for states and territories that are further ahead in their planning.