Gov. Nathan DealGov. Nathan Deal said Friday that Georgia would not create its own insurance exchange, a key element of the president’s recent health care reforms, because the financial burden would be too great for the state to shoulder.

In a letter to Health and Human Services Secretary Kathleen Sebelius Friday, Deal criticized the law’s “one-size-fits-all approach” and said his administration would not be a party to the mandated marketplaces.

“I remain committed to common sense health-care solutions that empower consumers to take responsibility for their own health, motivate the private sector and drive efficiencies for consumers, employers and governments alike,” Deal says in the letter. “I continue to hope that we might finally engage in a serious conversation about restoring meaningful flexibility to states around health care programs.”

In a separate statement, the Republican governor said he would now allow the appropriation of state revenues for a project that is “state-based in name only.”

“We have no interest in spending our tax dollars on an exchange that is state-based in name only,” he said. “I would support a free market-based approach that could serve as a useful tool for Georgia’s small businesses, but federal guidelines forbid that. Instead, restrictions on what the exchanges can and can’t offer render meaningless the suggestion that Georgia could tailor an exchange that best fits the unique needs of its population.”

Friday was the last date by which the state could notify federal officials whether it would establish the exchange.

Even though Deal decided the state would not create the exchange itself, the health care law still requires one, so the federal government will now assume that responsibility.

Deal’s letter also said the state would maintain its own guidelines for Medicaid eligibility.

The federal law originally required states to broaden their enrollment protocols lest they face stiff funding penalties, but the penalty provision was stripped when the U.S. Supreme Court weighed in. Now the expansion is only optional.

“The State of Georgia takes seriously its legal authority over the state’s Medicaid program,” Deal warned Sebelius in the letter. “We will continue to determine the eligibility for all individuals seeking Medicaid in our state.”

– James Richardson