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Kansas, Missouri Won’t Set Up Health Insurance Exchanges

States have less than a week to decide whether they will set up insurance exchange markets or whether the government will step in. Kansas, reluctantly, chose federal intervention.

Missouri will be unable to implement a key provision of federal health care law, Gov. Jay Nixon announced Thursday.

Meantime, Kansas Gov. Sam Brownback says he won’t support an application from Insurance Commissioner Sandy Praeger to establish a state-federal health insurance marketplace.

That means it will be up to the federal government to establish health insurance exchanges in Missouri and Kansas. The exchanges are designed to be online marketplaces where individuals and small businesses can compare and buy private insurance plans.

As part of the Affordable Care Act, or Obamacare, the states face a Nov. 16 deadline to notify the federal government if they want to run their own insurance exchange. They must be open for business by 2014. When states do not open their own, the federal government will step in and set up an exchange.

“I think it’s a duty best handled by the state,” Nixon said, later adding: “But a state-based option is not on the table at this time.”

This week, voters approved a ballot measure prohibiting the governor from establishing an exchange without the involvement of the General Assembly. The Democratic governor said that because of the constraints of that measure, and reluctance of Republican legislative leaders, the only option left is to tell the federal government Missouri will be unable to proceed with a state-based exchange.

A bill creating the “Show Me Health Insurance Exchange” cleared the Missouri House last year with unanimous support. The measure died in the state Senate, however, after several senators expressed concerns. It was never brought up during the most recent legislative session, and House leadership expressed little enthusiasm for the idea following the 2012 elections.

Brownback’s decision, announced Thursday, illustrates the divide over the federal health care law between the conservative Republican governor and the moderate Republican Praeger.

Praeger, who is an elected commissioner, had been working on a grant application to seek a state-federal partnership to manage the exchange in Kansas. Brownback had to sign a letter of support before the application could be filed with federal officials.

“Obamacare,” Brownback said in a news release, “is an overreach by Washington and (Kansans) have rejected the state’s participation. … We will not benefit from it and implementing it could cost Kansas taxpayers millions of dollars.”

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