Brownback: Kansas won’t partner with federal government on health insurance exchange

November 9, 2012 

TOPEKA – Gov. Sam Brownback said Thursday his administration won’t partner with the federal government to set up a health insurance exchange called for by the federal health insurance overhaul.

That means Kansans who don’t have health insurance probably will use a federally created exchange, or health insurance market, to compare and buy plans.

Brownback had put off his decision about a state-federal partnership until after the election. Last year, he sent back a $31 million federal grant that would have helped the state set up an exchange.

“Kansans feel Obamacare is an overreach by Washington and have rejected the state’s participation in this federal program,” Brownback said in a news release Thursday. “My administration will not partner with the federal government to create a state-federal partnership insurance exchange because we will not benefit from it and implementing it could cost Kansas taxpayers millions of dollars.”

The Affordable Care Act, often referred to as Obamacare, requires people to have some form of health insurance coverage. Part of the act allows states to use federal money to create a state-tailored exchange that suits its needs.

Kansas Insurance Commissioner Sandy Praeger created a grant application that would have moved the state forward with a federal partnership on the exchange. But she needed support from Brownback.

States have to notify Washington by next Friday if they are setting up health exchanges. It became clear that the federal health care law probably won’t be repealed when President Obama was reelected Tuesday.

“Our job at the insurance department was to be prepared with exchange information, and we were,” Praeger said in a prepared statement. “The governor has made his decision.”

Open enrollment for exchange plans is scheduled to start Oct. 1, 2013, and coverage will be effective Jan. 1, 2014.

In all, more than 30 million uninsured people nationwide are expected to gain coverage under the law. About half will get private insurance through the exchanges, with most receiving government help to pay premiums. Others could be served through Medicaid.

The concept behind requiring everyone to have health insurance is that people now pay a hidden tax through their insurance and hospital bills because hospitals have to serve people without insurance. When those people don’t pay, the expenses get folded into the bills of people who have insurance.

In 2010, Kansas accepted a $1 million planning grant for an exchange. When Brownback took office, he repositioned the state in opposition to the Affordable Care Act and sent back money intended to create a state-specific exchange. Praeger, a moderate Republican, created work groups to find ways to set up an exchange to prepare the state while awaiting a decision by Brownback on whether to create a local exchange. States that opt for a state-federal partnership can manage their exchanges and offer consumer assistance. The federal Health and Human Services Department will to run exchanges in states that aren't ready or willing to create their own exchanges.

Americans for Prosperity, which hammered Democrats and moderate Republicans this year for not fighting harder against Obamacare, immediately applauded Brownback’s decision.

“Establishment of a government exchange would increase taxes on businesses and raise insurance premiums on hardworking Kansans,” Derrick Sontag, AFP’s Kansas director, said in a prepared statement. “President Obama wants states to believe they have flexibility to control their exchange when in reality, the federal government has to approve of significant changes sought by the state. This type of federal government control is being rejected by the Governor, and AFP calls on the 2013 Kansas Legislature to take the same position.”

Wichita Democratic Rep. Nile Dillmore said the governor is throwing the interests of Kansans under the bus to spite what is now the law of the land.

“Why would he give up a Kansas-based exchange for a federal government exchange?” he asked. “I thought he was the governor who said the federal government can’t do anything right. Now he’s going to turn it over to the federal government?”

Dillmore said he’s not surprised by the move, given Brownback’s rejection last year of $31.5 million in federal money to create a Kansas-specific exchange.

“Now he’s going to use the rationale that it’s going to cost money to do it?” Dillmore said. “It’s not a very rational approach, in my opinion.”

Seventeen states and the District of Columbia are on track to set up their own exchanges, while 10 have decided not to do so. The federal government could end up running the show in half or more of the states.

The states on track include California, Colorado, Connecticut, Hawaii, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Nevada, New York, Oregon, Rhode Island, Utah, Vermont, Washington, and West Virginia. Not setting up exchanges are Alaska, Florida, Louisiana, Maine, New Hampshire, South Carolina, South Dakota, Texas, Virginia, and Wisconsin. Missouri and Kansas joined the list Thursday.

A recent AP poll found that 63 percent of Americans want states to run the exchanges, with 32 percent favoring federal control.

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