Kansas becomes second state to return federal health exchange money

Kansas Gov. Sam Brownback is returning a $31.5 million federal grant designed to help his state set up a health insurance exchange because "there is much uncertainty surrounding the ability of the federal government to meet its already budgeted future spending obligations," he said in an Aug. 9 statement.

The governor also said he wants to free Kansas from the federal obligations attached to the grant. Brownback spokesman Samir Arif did not specify the obligations the governor is trying to avoid, but he said that all exchange options remain on the table and that any further decisions will be made in consultation with the Kansas Legislature. If Kansas does not create its own health marketplace under the health system reform law, the federal government will operate one in the state beginning in 2014.

The Dept. of Health and Human Services awarded early innovator grants to Kansas and six other states in February. The grants are directed to help states design the health information technology needed to operate a health insurance exchange.

In April, Oklahoma Gov. Mary Fallin returned the state's $54.6 million grant, also citing the desire to avoid federal obligations. In February, Fallin had touted the grant as a way for Oklahoma to design its own insurance exchange, a goal she listed as one of her top priorities in 2011. But in April she cited the rejection of the grant as a way for Oklahoma to develop its own exchange and to prevent the implementation of a federal exchange.

Kansas Medical Society Executive Director Jerry Slaughter said the society has been assisting with exchange planning, but that Brownback did not tell medical society leadership his reasons for returning the grant. However, Slaughter expects exchange planning to continue in the state.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2011/08/22/gvbf0822.htm.