By Gene Meyer | Kansas Reporter

Kansas lost one health care gamble. What happens next?

FAIRWAY – Kansas Gov. Sam Brownback is doubling down on health-care exchanges.

The first-term Republican lost one bet when he returned $31.5 million from the U.S. Department of Health and Human Services to create a computer network that would give state residents one-stop access to health-insurance policies, which many people will be required to buy beginning in 2014.

The requirement and the computer networks known as health insurance exchanges are key pieces of the Patient Protection and Affordable Coverage Act. Brownback opposed the legislation and vowed in August to avoid spending any money or effort to support ObamaCare until the U.S. Supreme Court ruled on constitutional challenges raised by Kansas and 22 other states.

The high court last month rejected those challenges, upheld the law, and in the process put Kansas nearly a year behind schedule in preparing to set up the required marketplace. Time remains to create some kind of Kansas-specific exchange, state officials say, though it would include more federal involvement than first planned.

But the state must act by Nov. 16 to preserve that choice, or Kansas’ exchange will become whatever the federal government deems it to be.

That’s just eight working days after the next U.S. presidential election, though Brownback has said he believes GOP candidate Mitt Romney will repeal the act, should he win.

“The governor has said this is now a political issue that will be resolved by the American people in November,” said Sherriene Jones-Sontag, Brownback’s press secretary. “He will wait until after the November elections before making any decisions related to ObamaCare. Nor will we speculate on any ‘what ifs.’ ”

What if, for example, President Barack Obama win re-election, or future President Romney is unable to effect a repeal.

That’s where the future of potential health care exchanges in Kansas gets murky, said Linda Sheppard, head of the Kansas Insurance Department’s Accident and Health Division. Kansas Insurance Commissioner Sandy Praeger picked Sheppard to head a statewide planning project to design the exchanges after the Affordable Care Act passed in 2010.

Kansas faces three choices, Sheppard said. The first is to try again for a Kansas designed exchange, such as that state insurance regulators, health-insurance companies and care providers were working on before Brownback returned the federal money to fund that effort.

Kansans would need to make up a nearly a year’s lost time by Nov. 16 to meet a federal deadline for filing detailed plans, she said, “and we don’t think, realistically, that can be done.”

The second choice is to cut a partnership deal with federal Health and Human Services regulators, which also must be done by Nov. 16.  Details remain to be worked out but, broadly speaking, federal officials would set the rules for the exchange, Sheppard said. Kansas insurance regulators would enforce those rules by using their regulatory powers to determine what insurance plans and companies meet the required standards.

The third choice, should it come to that, is for federal regulators to run the exchanges, Sheppard said.

That is the least attractive of the three choices because few federal Health and Human Services regulators have much experience regulating insurance, which historically has been left to state insurance departments, she said.

A federally run exchange would mean more regulation for insurance companies that do business in Kansas, Sheppard said. Companies working on the exchange would still need to meet Kansas standards for financial strength, fair business practices and good management.

“State insurance regulators don’t lose any authority in this arrangement,” Sheppard said. “It just adds another layer of bureaucracy to deal with.”

Meantime, no one knows this far in advance of 2014 ‘s coming universal coverage requirement what the plan might really look like, said Cindy Samuelson, a vice president for communications at the Kansas Hospital Association in Topeka.

Some of the federal requirements, such as allowing young adults to stay on the their parents’ plan up to age 26, are as popular as the requirement to buy coverage  and other controversial features are unpopular, Samuelson said.

“What I think we don’t want to do is to go back again and have that same long political discussion that led up to the court ruling,” she said.