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TOPEKA (AP) — Gov. Sam Brownback says Kansas will have a federally run health insurance exchange, after he declined to support Insurance Commissioner Sandy Praeger's application for a state-federal partnership.

Brownback had said months ago he would wait until after Tuesday's election before moving forward on health care. He announced his decision Thursday after meeting with Praeger, who sought the governor's signature on a letter of support for a state-federal exchange.

Brownback's decision illustrates the divide over the federal health care law between the conservative Republican governor and the moderate Republican commissioner.

States have until Nov. 16 to inform the federal government if they plan to create their own health insurance exchanges, partner with the federal government or have their exchanges run by federal agencies.

TOPEKA (AP) — Topeka — Kansas officials are considering their next steps to implement the federal health care law now that the presidential election has been decided and deadlines are looming.

The state has until Nov. 16 to tell the federal government whether it wants to be a partner in creating an online health insurance marketplace. Insurance Commissioner Sandy Praeger’s office is preparing a partnership application and will seek grant money to implement the exchange.

But to do so, Praeger, a moderate Republican, must get a letter of support for the state’s partnership from Gov. Sam Brownback, a conservative Republican who is opposed to the health care law. The two are expected to meet this week to discuss the letter and application.

Both are elected officials and have been at odds over how the state should proceed in implementing the law. Linda Sheppard, project manager for implementing the law, said Praeger’s staff hadn’t spoken with the governor about what is included in the state’s application and didn’t speculate on the chances of his approval.

“He has been very consistent that he has not wanted to talk about this and not willing to look at these issues until after the election,” Sheppard said.

Brownback delayed the state’s decisions hoping that a Mitt Romney victory would lead to a reprieve for states. But with President Barack Obama’s victory Tuesday night and a ruling this summer by the U.S. Supreme Court upholding the law, chances of the law’s repeal vanished.

The governor’s spokeswoman, Sherriene Jones Sontag, declined to speculate whether Brownback would sign off on the insurance department’s application to partner with the federal exchange.

The federal health care law was a factor in Tuesday’s legislative election results, following the trend set in 2010 when Brownback was elected and large numbers of conservative Republicans were elected to the Legislature. Nearly all ran on the platform of opposing the health care law over concerns that it was an unconstitutional intrusion on state and individual rights.

Those victories were followed by more wins by conservatives in the August primary and on Tuesday, which marked defeats of moderate Senate Republican incumbents who opposed a measure to amend the Kansas Constitution granting so-called health care freedom choices to residents.

“The people of Kansas have spoken loudly three times, they want us to pursue Kansas solutions,” Jones-Sontag said. “We are discussing options and alternatives with like-minded states and with our legislative partners in Kansas.”

Sheppard said the state was applying to fill the roles of plan management and consumer assistance. She said because of timelines to implement the law that Kansas was unable to set up its own exchange. The insurance department would have to receive legislative approval to spend any federal dollars on the exchange partnership.

Pressure from the conservative Republicans last year prompted Brownback to reject $31.5 million in federal funds to help build the computer infrastructure necessary for an exchange.

States must have the exchanges in place and approve a basket of qualified plans that would be available for consumers to purchase that meet minimum federal guidelines.

In addition to the exchanges, the federal health care law says that in 2017, states must pick up 5 percent of the cost of the Medicaid expansion. The figure grows to 10 percent by 2020. In the past, states generally have been required to pick up about 40 percent of the cost, and in Kansas, the state’s share for its $2.9 billion-a-year program is almost $1.2 billion.

Some state officials also worry that Kansas could face substantial new costs if it agrees to the Medicaid expansion because people who are now eligible without the expansion but not participating in the program also could seek coverage. That issue was noted by a Congressional Budget Office report in July.

By John Hanna, Associated Press

TOPEKA (AP) — Kansas' insurance regulator is asking Gov. Sam Brownback to spell out the requirements for health coverage to be sold in a new online marketplace mandated by the federal health care overhaul, but Brownback still plans to make no decisions until after the presidential election.

Insurance Commissioner Sandy Praeger made her recommendations public Tuesday, a day after she sent the conservative Republican governor a letter containing her proposals for the "benchmark plan" that companies must offer to participate in the online marketplace. The federal health care law says such marketplaces, known as exchanges, will start operating in 2014.

Praeger's proposal calls for requiring companies to offer the same coverage Blue Cross Blue Shield of Kansas does in its comprehensive plan for small groups, along with additional coverage for children's eye and dental care. The commissioner noted in her letter that if Brownback does not set the state's requirements by the end of September, the U.S. Department of Health and Human Services could do it for the state.

Brownback has strongly criticized the federal health care law, enacted in 2010 and championed by President Barack Obama. Praeger, a moderate Republican, has praised the law as an important step toward providing universal access to health insurance, and she and Brownback disagree over how aggressive the state should be in setting up an exchange.

"My administration will not make any decisions regarding the implementation of Obamacare until after the November elections," Brownback said in a statement Tuesday, reiterating the stance he's long held.

States have until Nov. 16 to declare whether they still want to be partners in running an exchange or leave it entirely to the federal government. Kansas hasn't started to set one up because Brownback and Republicans who control the Legislature oppose the law. Brownback has argued that if Republican Mitt Romney defeats Obama, many requirements in the law are likely to be waived.

Praeger's proposal for the exchange's benchmark plan is designed to give consumers who use the online marketplace familiar coverage at competitive prices, said Linda Sheppard, the Insurance Department's project manager for the health overhaul.

"That does help the market stay stable," Sheppard said.

The federal government limited Kansas and other states to setting their benchmarks based upon 10 health plans already widely available to their consumers.

Blue Cross Blue Shield of Kansas provides coverage for about 900,000 Kansans, and Praeger is proposing that the exchange benchmark be tied to its most popular small group plan. At the end of March, more than 30,000 people were enrolled in it.

"Selecting this plan will allow for the most continuity in the marketplace as a large number of Kansans already have these benefits through their small business employer or as individuals," said company spokeswoman Mary Beth Chambers.

HHS has already said it would base its benchmark for Kansas on the same plan.

But the federal health care law requires that the benchmark include coverage for children's eye and dental care, and the biggest health plans in Kansas generally don't, except through supplemental policies. Praeger proposes that coverage for those plans mirror what's available through the state for children of working-class families that can't afford private insurance.

Sheppard said that if HHS sets the benchmark for Kansas, it could mandate different coverage for such services, as well as coverage for services such as speech and physical therapy.

"This is all kind of coming together in a really short time frame," she said. "The companies are obviously really anxious to get the benchmark set as early as possible."

By Ricardo Alonso-Zalvidar

WASHINGTON — Republican governors who've balked at creating new private insurance markets under President Barack Obama's health care overhaul may end up getting stuck with the very thing they're trying to avoid.

Unless Mitt Romney wins in November, states that haven't set up the required markets could find Washington calling the shots on some insurance issues the states traditionally manage, from handling consumer complaints to regulating plans that will serve many citizens.

It could turn into a political debacle for those who dug in to fight what they decry as "Obamacare."

"You're kind of rolling the dice if you think (Obama's health care law) will go away," said Kansas Insurance Commissioner Sandy Praeger, a Republican. If Romney can't make good on his vow to repeal the overhaul, "you are just giving up a lot of authority."

The law envisioned that states would run the new markets, called exchanges, with federal control as a fallback only. But the fallback now looks as if it will become the standard option in about half the states — at least initially.

It would happen through something called the federal exchange, humming along largely under the radar on a tight development schedule overseen by the Health and Human Services Department in Washington.

Exchanges are new online markets in which individual consumers and small businesses will shop for health insurance among competing private plans. The Supreme Court's health care decision left both state exchanges and the federal option in place.

The exchanges are supposed to demystify the process of buying health insurance, allowing consumers to make apples-to-apples comparisons. Consumers will also be able to find out if they're eligible for new federal subsidies to help pay premiums, or if they qualify for expanded Medicaid.

It's all supposed to work in real time, or close to it, like online travel services. Open enrollment would start a little over a year from now, on Oct. 1, 2013, with coverage kicking in the following Jan. 1.

Eventually more than 25 million people are expected to get coverage through exchanges, including many who were previously uninsured. As exchanges get more customers, competition among insurance plans could help keep costs in check.

But only 14 states and Washington, D.C., have adopted plans for their own exchanges: California, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Nevada, New York, Oregon, Rhode Island, Utah, Vermont, Washington and West Virginia. Some could still backtrack.

Kentucky and Minnesota are pushing forward with their own exchanges, and others may be able to partner with the federal government. States face a Jan. 1, 2013 deadline for Washington to sign off on their plans.

Meanwhile, the federal exchange is advancing.

HHS contractors are working feverishly to design and test computer systems that would make the federal exchange come alive. It's a top priority for the administration, which is guarding the details closely. Estimated price tag: at least $860 million.

The government is "on track in moving aggressively to set up this market structure," Mike Hash, the HHS official overseeing the effort, told industry representatives, state officials and public policy experts at a recent Bipartisan Policy Center conference. "We're on track ... to go live in the fall of 2013."

"I think the pressure is on them to deliver, and I fully expect they will," said Jon Kingsdale, who was the founding director of the nation's first health insurance exchange, created under then-Gov. Romney's health care overhaul in Massachusetts.

Now a consultant to states, Kingsdale says he expects the federal exchange to look very much like the one already operating in his home state.

There will be a website, and you'll be able to put in your ZIP code and get a list of available health plans. There will be a section where you can find out if you qualify for subsidies, or whether you might need to look at Medicaid. There will be cost calculators to allow you to compare different levels of coverage: platinum, gold, silver and bronze. There will be tools that allow you to see if your doctor or hospital is with a particular plan.

In an interview, HHS official Hash said the government is undaunted by the prospect of running exchanges in half the states or more.

"What we are talking about building here is a system that is really using 21st century technology, and it's not dependent like in the past on bricks and mortar or how many (federal employees) you have," said Hash. "Information technology produces the opportunity for efficiency. It's much more easily scalable if you need to do it for a larger number of individuals."

Paper applications also will be accepted. And Hash expects people will have plenty of help to navigate the system, from volunteers to insurers advertising to reach new customers.

The government has awarded two big technology contracts for exchanges. Virginia-based CGI Federal Inc. is building the federal exchange. Maryland-based Quality Software Services Inc. is building what's called the federal data services hub, an electronic back office that will be used by the federal exchange and state exchanges to verify identity, income, citizenship and legal residence.

Running the data hub will involve securely checking sensitive personal information held by agencies such as the Social Security Administration, Internal Revenue Service and Homeland Security Department. Technology experts say that's a challenge but not insurmountable. HHS rejected an Associated Press request to interview the contractors.

The administration says consumers should not notice any difference between the federal exchange and marketplaces run by the states. But state regulators disagree.

"I think we would be giving up something," said Praeger, the Kansas insurance commissioner. "It would have much more of a federal flavor than a Kansas flavor."

Praeger wants Kansas to have a state-run exchange, but GOP Gov. Sam Brownback and Republican state legislators are opposed. If opponents prevail, the state will have a federal exchange.

But conservatives are raising yet another argument in hopes of shutting down federal exchanges.

Led by Cato Institute economist Michael Cannon, several opponents say the letter of the complex law precludes the government from subsidizing coverage through the federal exchange. They say the law allows only tax credits to help consumers pay premiums in state exchanges, not the federal exchange, and that's the way Congress intended it. If states don't set up exchanges, that would starve the health care overhaul of money and cause it to unravel, they contend.

But the IRS and two nonpartisan congressional units — the Congressional Budget Office and the Joint Committee on Taxation — conducted their own analyses and concluded that subsidies are available in both types of exchanges, federal and state-run. Senate Finance Committee Chairman Max Baucus, D-Mont., one of the law's principal authors, says that's exactly how Congress intended it.

At the National Association of Insurance Commissioners, spokesman Scott Holeman says, "At this time, we don't have any reason to question the federal government's interpretation of the statute."

The dispute may wind up in court but probably wouldn't get resolved until after the exchanges were up and running.

By John Hanna, Associated Press

TOPEKA -- Kansas Insurance Commissioner Sandy Praeger says the state shouldn't wait until after November's presidential election to move toward complying with a key part of the federal health care law.

Praeger's comments Thursday about the U.S. Supreme Court's decision upholding the federal law put her at odds with Gov. Sam Brownback, a fellow Republican.

Brownback said he wants to wait until after the election to decide what Kansas will do about setting up an online health insurance marketplace. The health care law requires each state to have one operating in 2014.

The governor predicted that if GOP presidential nominee Mitt Romney gets elected, states won't face the requirement.

But Praeger says the state should still work on an online marketplace so that it has some say in how it's run.

Kansas Insurance Commissioner Sandy Praeger

Kansas Insurance Commissioner Sandy Praeger’s office recovered more than $10 million in insurance claims for policyholders in 2010.

The recovery amount was lower than in previous years, she said, but that’s likely because there were 3,820 formal complaints — 447 fewer than 2009. The number of inquiries — 1,517 — remained steady.

Recoveries are funds returned to policyholders through settlement of claims disputes with insurance companies, based on inquiries and formal complaints filed with the department. These funds are above and beyond what companies had originally offered consumers to settle the claims.

Since Praeger, of Lawrence, took office in 2003, the Kansas Insurance Department has recovered nearly $97 million for Kansans.

Consumers with insurance questions or concerns are encouraged to call the Consumer Assistance Hotline at 800-432-2484.

Complaints or inquiries can be made in writing to the Kansas Insurance Department, 420 S.W. Ninth St., Topeka, KS 66612 or online at www.ksinsurance.org.

CHANCE TO ASK QUESTIONS

Kansas Insurance Commissioner Sandy Praeger will be available Jan. 26 to answer questions about health reform and, of course, insurance.

She will participate in an online chat at 9 a.m. on WellCommons.com. Submit your questions at any time at WellCommons.com/chats.

Praeger is responsible for regulating all insurance sold in Kansas and overseeing the nearly 1,700 insurance companies and more than 94,000 agents licensed to do business in the state.