Gov. Sam Brownback gambled by waving off $31 million in federal funding for creation of a statewide computer network giving Kansans a one-stop venue to shop for health insurance.
The Republican decided to return cash earmarked for an online insurance exchange to the U.S. Department of Health and Human Services, an agency led by former Democratic Gov. Kathleen Sebelius.
Kansas Insurance Commissioner Sandy Praeger, who had organized a large task force to move the state toward the 2014 implementation of an insurance exchange mandated in the law signed by President Barack Obama, was shocked by the governor's decision to forfeit the grant.
"Don't we think it's right that people in this country have access to health care?" she said.
The wager by Brownback was intended to appease conservative, tea party elements of the Kansas Republican Party anxious "Obamacare" might prematurely seep into Kansas' government bureaucracy.
Brownback, a lawyer and former U.S. senator, believed the law to be unconstitutional. He reasoned Kansas would have no need for an exchange when the U.S. Supreme Court struck down the measure signed by Obama in 2010.
Flaws in this approach were evident, however, when the court flipped its cards Thursday to reveal a majority of justices believed most of the Affordable Care Act to be legitimate under the U.S. Constitution.
"I'm somewhat surprised," the governor said.
House Democratic leader Paul Davis, D-Lawrence, said the court's ruling meant Brownback's reluctance to allow an insurance exchange customized to Kansas' needs was a blunder.
"He made a mistake," Davis said. "Health insurance exchanges have had bipartisan support. There are plenty of Republicans who have championed exchanges."
Kansas has 350,000 residents, or 12.7 percent of the population, without health insurance coverage.
Under the federal reform law, states could create an exclusively state-based exchange, form a federal-state partnership exchange or step aside for implementation of a federally facilitated exchange. All would offer a menu of plans from health insurance providers to consumers weighing options. The federal government pledged financial and technical assistance to states setting up exchanges, which would operate on a format consistent with airline reservation shopping sites.
After the Supreme Court ruling, Praeger said Kansas had missed the opportunity to construct its own exchange.
There is a narrow window to collaborate with HHS on a state- federal exchange, she said. Under this alternative scenario, the state would still handle consumer complaints and determine which companies sold coverage on the exchange. The federal government would have jurisdiction over all other elements.
The deadline to submit a partnership request is in mid-November.
BETTING ON ROMNEY
Brownback was unmoved by either Davis' critique or Praeger's call to action.
The governor said he was prepared to gamble on presumed Republican presidential nominee Mitt Romney beating Obama in November. If Romney prevails, there is a chance Congress would repeal a portion or all of the health insurance law.
"There's a global waiver that's been proffered by one of the presidential candidates -- if he's elected," Brownback said. "It's a political issue. I want to see what happens in the fall."
The governor didn't speculate what he would do if Obama won election to a second term.
Praeger said the wait-and-see attitude of the Brownback administration undercut the state's capacity to influence outlines of the exchange.
"What's the harm in preparing for the eventuality that things don't change?" she said. "Kansans are still better off if we try to keep all of our options open."
Praeger said the Brownback administration ditched the $31 million grant but sought and received a separate federal grant to finance the majority of a $135 million computer-based eligibility system for state government programs. It will be capable of evaluating requests for the state-federal Medicaid program.
Add-on technology linking the new system, called KEES, to an exchange covering the private insurance market would cost $4 million to $5 million, Praeger said.
SWEETEN THE POT
Thirty-four states and the District of Columbia already have accepted $850 million to finance exchanges.
On Friday, Sebelius said more funding would be made available from HHS for states for work on exchanges. Under the revised format, HHS would make money available for cooperative agreements with states through the end of 2014.
Brownback is skeptical the federal treasury could absorb massive budget increases required to meet proposed extension of subsidized Medicaid services to millions of Americans.
The reform law pledges federal funding for 100 percent of Medicaid enrollment growth for three years, which eventually would leave states vulnerable to budget pressures to sustain expansion.
For example, if Kansas agreed to provide Medicaid to childless adults, as many as 130,000 people could be added to the rolls.
"The price tag for the expanded Medicaid that the fed has to take on is $100 billion. It's unsustainable," Brownback said. "American citizens carrying huge debt. We're seeing what that is doing in Europe now, which has a bigger safety net. You're starting to see those problems here."