SD won’t operate a health insurance exchange

• Daugaard

South Dakota Gov. Dennis Daugaard

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PIERRE — South Dakota will not set up its own health insurance exchange, instead deferring to the federal government to operate and pay for a key component required by the federal health care overhaul, Gov. Dennis Daugaard said Wednesday.

President Barack Obama’s health care law requires that each state have such an exchange, an online marketplace where patients and small businesses can shop for health insurance among competing plans. The federal government will directly operate and fund exchanges in states that choose not to operate their own.

Daugaard said South Dakota will join other states that have chosen not to run their own exchanges. About half the states apparently will let the federal government run exchanges, at least initially.

“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 written statement.

After the Supreme Court upheld the health law in June, Daugaard said the state wouldn’t implement any part of the law until at least after the November election in the hope that a new president and new Congress would overturn it. The state faces a deadline of Nov. 16 to let federal officials know whether it would operate its own insurance exchange.

On Wednesday, the governor said annual operating costs for a state-operated exchange would be too expensive, costing between $6.3 million and $7.7 million.

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