Kansas Signs $135M Contract to Build Alternative to Health Insurance Exchange

Kansas signed a $135 million contract this week for a new state computer system designed to centralize applications for Medicaid, according to a Kansas Reporter report.

The new system, known as the Kansas Eligibility Enforcement System, is designed to serve as the state's alternative to a health insurance exchange, required by the federal healthcare law starting in 2014.  

Kansas is one of 26 states suing the federal government to overturn provisions of the Patient Protection and Affordable Care Act, part of which requires uninsured Americans to purchase health insurance through an exchange if no other source is available.

Kansas Gov. Sam Brownback, a Republican, returned nearly $32 million in funding to the federal government, saying the state could not take the money for an exchange without tying itself to the health reform law.

Approximately 90 percent of the money committed to KEES — more than $121 million — will also be federally funded, but the funding comes from CMS instead of programs in the Affordable Care Act.

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