Democratic Gov. Laura Kelly said Friday the bill granting Kansas Farm Bureau authority to sell health coverage exempted from state and federal regulation would become state law without her signature and linked the gesture to her desire for passage of a Medicaid expansion bill.

Kelly's options were to veto, sign or permit the controversial bill to be enacted in accordance with wishes of the 2019 Legislature. The law allows the politically influential farm organization to market health policies that would fall short of federal standards of the Affordable Care Act. It wouldn't be regulated by the Kansas insurance commissioner because the statute technically defined the coverage as something other than insurance.

House Bill 2209 passed 84-39 in the House and 28-12 in the Senate -- both veto-proof majorities -- at behest of GOP leadership.

"After long and careful deliberation – including in-depth discussions with both opponents and proponents -- I continue to harbor serious reservations about this legislation," Kelly said. "I believe it is fundamentally wrong to deny health coverage to anyone because they have a pre-existing condition. I also fundamentally believe that governing demands a relentless pursuit of common ground."

The governor said the 2019 Legislature, blocked at this juncture by Senate Republicans, ought to approve a Medicaid expansion bill capable of delivering quality health coverage to 150,000 Kansans. Under the ACA, the federal government would pay 90 percent of expansion costs.

Rich Felts, president of Kansas Farm Bureau, said Kelly made a difficult decision in the spirit of compromise. He said the Legislature and Kelly should continue to seek a "comprehensive solution to the health care needs of Kansas" in 2019. He did so without mentioning Medicaid, but made reference to improving health care services to Kansans not affiliated with the Farm Bureau.

"She has paved the way for lawmakers to advance a comprehensive health care solution that will benefit our entire state," Felts said. "The governor’s plan to help rural hospitals, create new jobs and expand affordable health care to non-KFB members remains a critical piece of that puzzle."

Senate President Susan Wagle, R-Wichita, praised the Kansas Farm Bureau for "an affordable alternative, especially one that won’t fall under the disaster of Obamacare," which is another term for the ACA.

"Today," Wagle said, "we took a great step towards reducing the number of uninsured Kansans while increasing competition and free-market options for health care coverage.”

Farm Bureau said the nonprofit organization could sell coverage to as many as 42,000 Kansas individuals and families at a lower cost if not bound to mandates requiring insurance providers include expensive treatments and procedures. The bill patterned after laws in Tennessee and Iowa earned support from rural legislators aware of unmet demand for health care as well as urban lawmakers opposed to the ACA.

"The potential consumers for this product are begging us to do it," said Rep. Don Hineman, a Dighton Republican supportive of Medicaid expansion.

Sen. Rob Olson, an Olathe Republican who chairs the Senate’s insurance committee, said the Farm Bureau option was "going to save and help our rural communities."

The legislation was sharply denounced by Democrats in the Legislature struggling to convince Republican leadership to advance a bill expanding Medicaid eligibility to about 150,000 Kansans. The House adopted a modified version the expansion plan recommended by Kelly, but the Senate has yet to take it up. The Senate rejected a Medicaid expansion amendment to the Farm Bureau bill.

Kelly, who took office in January, said potential downside of the Farm Bureau law would be mitigated if coupled with a deeper commitment to Medicaid, "a stable, secure, proven healthcare option." In the last decade, she said, 300 studies confirmed Medicaid expansion to be effective and necessary.

"We know with certainty that it will strengthen our economy, save taxpayer dollars, and provide healthcare to roughly 150,000 Kansans," she said. "I challenge legislators to join me in this good-faith effort, meet me halfway, and enact Medicaid expansion before the 2019 legislative session adjourns."

The 2017 Legislature approved a bill broadening eligibility for Medicaid, but the bill was vetoed by then-Gov. Sam Brownback. Kansas is among 14 states to not expand eligibility for Medicaid under the ACA.