On Thursday, Texas Gov. Rick Perry sent a letter to Health and Human Services Secretary Kathleen Sebelius to officially let her know Texas would not partner with the federal government in setting up health exchanges under Obamacare.
Perry had indicated he would not set up a state healthcare exchange, especially as he eyes another gubernatorial run in 2014 and potentially a presidential run in 2016. He made it official a day before Friday's deadline. Sebelius has since extended the deadline to December 14.
"This is a federally-mandated exchange with rules dictated by Washington," Perry wrote in his letter. "It would not be fiscally responsible to put hard-working Texans on the financial hook for an unknown amount of money to operate a system under rules that have not even been written."
Obamacare requires states to set up health care exchanges to give those who are uninsured a marketplace to purchase insurance by October of 2013.
Perry, a fierce advocate of states' rights, has opposed Obamacare and has insisted the federal government should not require states to spend a certain amount of money on Obamacare programs.
Texas leads the nation in uninsured, with 25% of its residents (6.2 million Texans) without health insurance. Democrats had urged Perry to reconsider, while Republicans in other states -- like New Mexico Gov. Susana Martinez -- agreed to healthcare exchanges because they did not want the federal government controlling a system that would be mandatory and wanted some local control.
Under Obamacare, the federal government will set up a healthcare exchange for states that do not implement one on their own. Conservatives have insisted the state exchanges should not be set up to delay the implementation of Obamacare.
Health care expert Betsy McCaughey explained that state exchanges would be like a "a supermarket that only sells cereal" because the exchanges would only sell government-designed and government-backed plans. She said "in most states, exchanges will be an 800 number, a Web site and a government office, like the DMV."
In addition, states that do not set up exchanges could also potentially sue the federal government when it attempts to enforce the Obamacare mandate, an option that states who go forward with the Obamacare exchanges would not have.