Right now, several states are in the process of trying to set up their state’s health insurance exchange. Many were given grant money from the federal government that was to be used to help with the financial aspects of starting an exchange. Kansas has decided to give that money back.
In February of 2011, the Obama administration awarded $241 million in grants to seven different states. The grant money was to be used by the states to develop new internet based exchanges for health insurance. Oklahoma got $54.6 million in grant money. Oregon got $48.1 million. Wisconsin got $37.8 million from this grant and Massachusetts got $35.6 million. New York got $27.4 million, and Maryland received $6.2 million.
The state of Kansas got $31.5 million in grant money to use in setting up its state health insurance exchange. This week, Kansas decided to return that grant money to the federal government, rather than use it to set up a prototype health insurance exchange. The money came from the U.S. Department of Health and Human Services, and that is where it is going right back to.
Kansas is the second state that has made the decision to return the grant money that was intended to be used to create a health insurance exchange. The state of Oklahoma made its decision to return its share of the grant money, $54.6 million, to the federal government back in April of 2011. This brings the grand total of returned grant money to nearly $90 million.
State Governors who are Republican are returning the grant money because they are interested in making efforts to block the implementation of the laws that came about due to the health care reform. This is, no doubt, because the health care reform is coming from lawmakers who are Democrats.
Giving back the money is a way for the Republican lawmakers to make a statement that shows that they are against health care reform. It is worth noting that Kansas is one of the states that is involved with a lawsuit that is questioning the constitutionality of the mandatory insurance requirement that will become law in 2014, (as part of the Affordable Care Act).
It also could be a way for these states to grab more control over the details involved in the health insurance exchanges. If they set one up without using the money that came from the Early Innovator Grant, they might be able to get around some of the restrictions that the grant would require. It could lead to a more flexible exchange then they would have been able to set up if they used the grant.
If Kansas, or any other state, fails to set up its own heath insurance exchange, then the federal government will set one up for them. It is assumed that if the federal government creates a particular state’s exchange that it will be a “one size fits all” approach. This means that there could be one format that the federal government uses in all of the states that lack an exchange. Those states will lose their ability to customize their exchange to better fit the needs of their citizens.
Image by C. G. P. Grey on Flickr