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Ohio will let the federal government run its health care exchange, a key portion of health care reform, Gov. John Kasich said Friday.

The state will try to keep control of several key features, such as determining who qualifies for Medicaid and enforcing rules on plan benefits.

“Based on the information we have, states (under the exchanges) do not have any flexibility to build and manage exchanges in ways that respond to the unique needs of their citizens or markets,” Kasich wrote to the Centers for Medicare and Medicaid Services.

The exchanges are meant to provide a market for individuals and the smallest companies to buy affordable health care policies, with subsidies for low-income consumers.

Consumers are supposed to be able to choose policies by October 2013 with coverage starting in January 2014.

The exchanges are one of the latest flashpoints in implementing President Barack Obama’s Affordable Care Act.

Like other Republican governors, Kasich had resisted implementing any part of the law until it was ruled constitutional by the Supreme Court in June and Obama was re-elected Nov. 6.

“Given the lack of opportunity for consumer input at the state level and the administration’s resistance to the consumer protections, we are likely better off with a large federal role in Ohio’s exchange at this point,” the pro-reform group Ohio Consumers for Health Coverage said.

Political forces predictably cheered or jeered Kasich’s decision.

“I’m proud of my governor, John Kasich, for taking a stand and resisting the federal takeover of health care in Ohio,” said House Speaker John Boehner, R-West Chester.

“The governor had over two years to seek clarity on how to set up a state exchange while over 20 other states made progress,” said Chris Redfern, chairman of the Ohio Democratic Party. “Instead Kasich dragged his feet and politicized the process, giving a million-dollar grant back to DC and refusing to apply for hundreds of millions more that could have helped with an exchange.”

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