The Choice Confronting Republican Governors Republican governors and legislators routinely rail against federal intrusion in activities that they think would be better managed by the states. This week they will have a chance to show that they really mean it. Under the Affordable Care Act, the states can either set up health insurance exchanges on which their residents can shop for comprehensive policies and apply for subsidies to lower their costs, or they can let the federal government do it for them. Many states, particularly those led by Republicans, have refused to create the exchanges, hoping that the health care reform law would be overturned legally or repealed by Congress. But President Obama's re-election and a Supreme Court decision upholding the constitutionality of the law have dashed those expectations and left the states to face this sobering reality: They have until Friday to tell the federal government whether they will create their own exchange or will leave the task to the Department of Health and Human Services. The exchanges, which are supposed to start enrolling people by October 2013, with coverage beginning on Jan. 1, 2014, are an essential element of health care reform. They are online marketplaces where individuals and small businesses will be able to choose among private plans for one that best meets their needs. The insurance plans must meet federal criteria for providing essential benefits and consumer protections. Most of the people who use them are expected to be low- and moderate-income individuals and families. With an exchange, families with incomes up to 400 percent of the poverty level would be able to get federal subsidies to help pay their insurance premiums. So far about 15 states and the District of Columbia have established the framework for exchanges, and three others will run exchanges in partnership with the federal government. At least 11 states have said they will not set up exchanges, although some may change their minds now. Some Republican governors, including Chris Christie of New Jersey, had said they would decide after the election. There are good reasons a state would be wise to set up its own exchange. The exchanges will work best if they are carefully integrated with other health programs in the state - to ensure, for example, that there is a seamless transition between Medicaid coverage and subsidized coverage on the exchanges when people bounce in and out of jobs. State officials also presumably know better than the federal government if there are special health needs among their residents or special insurance considerations that should be accommodated. The federal government will soon have to issue detailed regulations and guidance documents defining more precisely what "essential health benefits" must be covered, how consumer protections will be judged sufficient, and how much flexibility states will have to manage their exchanges. And at this point, it is not clear how many insurance plans will be competing on the exchanges and what the premiums may be. In the meantime, pragmatic Republican legislators, insurers and advocacy groups for patients and health care providers ought to press their governors to move ahead. The federal government would prefer that states handle the job, and so, in theory, should Republicans who are interested in having the states determine the choices.