South Dakota will not set up a state health insurance exchange where the uninsured, among others, could use premium subsidies authorized by the health care reform law to buy coverage, South Dakota Gov. Dennis Daugaard said Sept. 26.

"After extensive research and analysis, it has become very apparent that operating our own exchange will simply not work for South Dakota," Daugaard said in a statement.

"The federal law requires exchanges to be self-sustaining by 2015, which means we would either have to charge a fee to South Dakota citizens using the exchange or increase taxes, neither of which I am willing to do," said Daugaard, who describes the 2010 Patient Protection and Affordable Care Act as an "ill-advised law" that he hopes is repealed.

South Dakota joins several other states, including Texas, whose governors said they will not set up the exchanges.

Under the health care reform law, the federal government can set up health insurance exchanges in states that decline to do so.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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