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WASHINGTON, Nov 16 (Reuters) - The Republican governors of Ohio and Wisconsin on Friday rejected a major provision of President Barack Obama's healthcare reform law that calls on U.S. states to set up online health insurance markets.
The news, which came a day after the Obama administration gave states an extra month to decide their participation, demonstrates the differing political whirlwinds that reform has spawned in Republican-led states since Obama's re-election ensured implementation of the healthcare law.
The federal government will now be required to create exchanges in both states. While Wisconsin Governor Scott Walker issued an all-out rejection of the exchange provision, Ohio Governor John Kasich indicated that his state would partner with the federal government on exchange operations.
As a result, experts say Wisconsin could wind up ceding control of its individual health coverage market to the federal government, while Ohio would retain command of its market.
Ohio's decision, a step most states are expected to pursue, could also better ensure smooth exchange operations and enable the state's government to increase its participation down the road.
"What this reflects is the difficult position of some of these governors," said Jennifer Tolbert of the nonpartisan Kaiser Family Foundation, which tracks healthcare issues. "While they may oppose the new reform law and its requirements, some also don't want the federal government to come in and run the exchange and take over that responsibility."
The two governors, who both represent swing states where voters backed Obama in the Nov. 6 election, claimed the administration has been slow to divulge details about how exchanges should work while the law has provided insufficient flexibility to meet state needs.
"At this point, based on the information we have, states do not have any flexibility to build and manage exchanges in ways that respond to unique needs of their citizens or markets," Kasich said in a Nov. 16 letter to the U.S. Department of Health and Human Resources. "Regardless of who runs the exchange, the end product is the same."
He said Ohio's position could change as details about federal exchange requirements including essential benefits for consumers become available.
The Patient Protection and Affordable Care Act, which Republicans deride as "Obamacare," is scheduled to extend health coverage to more than 30 million uninsured Americans beginning Jan. 1, 2014. About half of those would be covered by exchanges, designed to allow working families to purchase coverage at subsidized rates.
More than a dozen mainly Democratic states including California, New York and Maryland have told the administration that they intend to set up their own exchanges.
As many as 15 states from Georgia and Texas to Wyoming and Maine had opposed Obamacare outright before the election, while many more hoped Republican nominee Mitt Romney would defeat Obama and repeal the health reform act along with it state requirements.
Friday's announcements from Wisconsin and Ohio followed similar decisions by Republican governors in Kansas and Nebraska. Like Wisconsin, Kansas opted for all-out rejection. Nebraska took the same road as Ohio, saying it would participate in a federally run exchange.
But since Obama's reelection, there have been growing signs that some states once thought to oppose healthcare reform may now be mulling the possibility of running their own exchanges or working in partnership with the federal government.
That list includes Florida, where Republican Governor Rick Scott has shown a willingness to work with the administration. "He has said that just saying 'no' is not an acceptable answer, and he looks forward to having a conversation that is solution-oriented," said Scott spokeswoman Jackie Schutz.
Friday was the original deadline for states to declare whether they would set up their own healthcare exchanges and submit blueprints showing how they would do so. But the administration has extended the deadline twice over the past week in response to requests from states.
States now have until Dec. 14 to say whether they will run their own exchanges and demonstrate how they intend to do so. State-operated exchanges are scheduled to be certified by the administration by Jan. 1, 2013.
States also have until Feb. 15, 2013, to say whether they would prefer a federal partnership exchange.
Whatever the choice, Health and Human Services Secretary Kathleen Sebelius pledges that Americans in all 50 states will have access to coverage through exchanges by Jan. 1, 2014, when the Affordable Care Act comes into full force.