New State Funding Opportunity Released

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) announced a second cycle of the State Flexibility to Stabilize the Market Grant Program. A follow-up to grants initially provided in 2018, this round of funding seeks to “enhance and support the role of states” in implementation and regulation relative to guaranteed issue and renewability provisions and Essential Health Benefits (EHBs). Through these grants, CMS aims to support innovation as well as compliance with federal requirements.

All states and the District of Columbia are eligible to apply for a total of $23.7 million in funding. Minimum awards will be $445,000, with additional funding to be made available if not all states are funded.

States can use funding for “planning and implementation” activities such as:

  • Market scans, such as to ensure carriers are complying with guaranteed issue and renewal requirements
  • Actuarial and economic analyses, such as to evaluate whether innovative measures could be used to strengthen to comprehensiveness and affordability of coverage (or access to that coverage) offered in the state
  • Enhancing the policy review process, such as to ensure carriers do not have discriminatory benefit designs
  • Hiring or contracting with clinicians to review formularies or create a standard operating procedure to aid in the review
  • Assessing their EHB benchmark plan and other benchmark plan options or adjustments
  • Reconciling state law and federal EHB requirements.
  • Providing public notice and comment opportunities in undergoing the process of changing the state’s EHB benchmark plan

In considering the funding opportunity and developing grant proposals, state policymakers should be mindful of the needs and opportunities in their state as well as the impact of the current landscape. Some Questions states should consider include:

  • How can this one-time funding be leveraged to support more efficient, as well as more effective, operations (such those as relative to the plan review process) going forward?
  • If the state is considering hiring staff or consultants with this funding, can they put into place innovative processes that can be maintained after the funding ends rather than getting only the two years of benefit? Or, conversely, can the funding be used for one-time analyses that are needed to support desired policy change, Section 1332 Waivers, or changes EHB benchmark plans that have otherwise been stalled?
  • How must public notice and comment opportunities be structured differently in light of the COVID-19 pandemic?
  • Can this opportunity be leveraged to advance innovation that might be newly possible under the new administration?

States seeking to apply for a grant must submit mandatory letters of intent by December 11, 2020 and grant applications (via by 3pm Eastern Time on January 20, 2021. CMS anticipates awarding two-year grants on April 1, 2021.

More information about the grant, the funding formula and how to apply is available on the CMS website. To discuss this opportunity with one of PCG’s subject matter experts, contact us at

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