Republican Gov. John Kasich wrote in a letter Friday to the Obama administration that setting up a state-based exchange is too costly and states have little control over how to operate exchanges.
"Regardless of who runs an exchange, the end product is the same," he said.
Kasich's administration has indicated for months that Ohio was leaning toward a federally facilitated exchange. State officials have noted their continued misgivings about the health care law, including what they say has been a lack of information from the federal government.
Ohio had been among the 26 states that had challenged the law, which the U.S. Supreme Court upheld this summer. And the state's voters overwhelming snubbed the overhaul's mandated coverage in a largely symbolic referendum last year.
Kasich was adamant in his letter that Ohio would continue to regulate its health insurance market, oversee health plans and make decisions around Medicaid eligibility. He said the Ohio Department of Insurance would retain its oversight over the insurance industry, "as it has done very effectively for more than 60 years."
The administration said it would submit additional details on its plan to federal officials by mid-February.
Exchanges are online markets in which individual consumers and small businesses will shop for health insurance among competing private plans. They'll be open for business on Jan. 1, 2014, but open enrollment for exchange plans will begin even sooner, on Oct. 1, 2013.
The exchanges are supposed to demystify the process of buying health insurance, allowing consumers to make apples-to-apples comparisons. Consumers will also be able to find out whether they're eligible for new federal subsidies to help pay premiums or whether they qualify for expanded Medicaid.
A group of consumer advocates said it supported Kasich's move to ensure that the state continues to regulate the insurance market and make Medicaid determinations. But Cathy Levine, who co-chairs Ohio Consumers for Health Coverage, said the coalition was disappointed Kasich didn't take advantage of certain aspects of the law, such as the federal grant money available to help consumers navigate the new market.
The state asserts that it already has a consumer services division in its insurance department to answer questions and address Ohioans' problems.
Levine said she also agreed with Kasich that many Ohioans wouldn't see a substantial difference between a state-run or federally run exchange.
"I think consumers are probably better off at this point if the feds run the exchange," Levine said. "We don't know how Ohio would operate the state exchange."
Democratic state lawmakers unsuccessfully pushed bills in the GOP-controlled Ohio Legislature to try to set up a state-run exchange.
"It just seems to make sense that one would want something that's more localized and more tailored for the people of the state," State Rep. Nickie Antonio, D-Lakewood, one of the bill's sponsors.
Ohio has yet to decide on another key part of the law: whether to broaden its Medicaid coverage. About 2.2 million Ohioans are enrolled in the nearly $19 billion program, which serves the poor and disabled
People earning up to 138 percent of the federal poverty level qualify for Medicaid under the health care law, except in states that reject the expansion.
Kasich has indicated he's open to trying to compromise with federal officials on possibly lowering that threshold.
More than 1.5 million Ohio residents are uninsured, or about 14 percent.
The federal law is expected to provide coverage to more than 30 million people nationwide through the exchanges and expanded Medicaid programs.