Kansas joins Oklahoma to opt out of “innovator” federal exchange grant
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Published: 10-Aug-2011

The state of Kansas on Tuesday (August 9) decided to return to the U.S. government the “early innovator” grant awarded last year. The grant was intended to finance the state’s creation of a health insurance exchange. 

In announcing the decision to turn down the federal funds, Governor Sam Brownback joined Oklahoma Gov. Mary Fallin, who was the first in the country to turn down the federal funds (and accompanying strings, or regulations) last spring.

Jason Sutton, health policy analyst at the Oklahoma Council of Public Affairs, praised the Sunflower State’s decision. In an interview, Sutton said, “Governor Brownback’s decision to return these funds that require states to set up an ObamaCare-compliant exchange is terrific news, but not surprising.

“When conservative leaders who are committed to patient-centered health reform actually read the requirements of the Early Innovator grants, they really have no other option but to reject the use of these funds.

With Oklahoma, Kansas has rejected the “early innovator” grant from the U.S. Department of Health and Human Services. The grants were first announced in February for early implementation of portions of the Patient Protection and Affordable Care Act (PPACA), including the health exchange.

Gov. Mary Fallin announced April 14 that the Sooner State would not use a $54 million federal grant to design an Oklahoma health insurance exchange. Instead, legislation originating in the House of Representatives will, legislators say, design an information network funded with state and private resources. 

In a release sent to CapitolBeatOK, Gov. Brownback commented, "There is much uncertainty surrounding the ability of the federal government to meet its already budgeted future spending obligations. Every state should be preparing for fewer federal resources, not more.

“To deal with that reality Kansas needs to maintain maximum flexibility. That requires freeing Kansas from the strings attached to the Early Innovator Grant." 

Sutton said, “Just like our governor, Governor Brownback has indicated a desire to institute consumer-oriented, free-market based reforms to Kansas’ health market, but ObamaCare exchanges are heavily regulated, restrict competition by prohibiting some insurers from participating and limit choice by allowing only a handful of plans to be made available for purchase.

“Such an exchange can’t seriously be considered ‘free market’ by any stretch of the imagination. Rather than accept the rigid requirements attached to the grant, Governor Brownback wisely committed to reforming Kansas’s health market on Kansas’ terms.”

Supporting Brownback’s call was Kansas Lt. Governor Jeff Colyer, a medical doctor. Colyer said, "Federal Medicaid mandates have cost Kansans over 400 million in the past 2 years alone. Full implementation of the mandates in the President's health care law would cost billions more." 

Tuesday, Dr. Colyer commented, "We will work to find innovative Kansas based solutions to Kansas challenges and be very selective in the federal funds the state applies for and receives.  We look forward to working with legislative leaders and Insurance Commissioner [Sandy] Praeger as we develop Kansas solutions."

Dr. Robert Moser, Secretary for the Kansas Department of Health and Environment, said in his own statement, "The early innovator grant does not address the most important issue in health reform, which is slowing the rate of cost growth in health care. Through the statewide Medicaid reform meetings, Kansas is taking the opportunity to decide for ourselves how best to provide health care access, improve outcomes and reduce costs for our state."

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