If a state does not establish Exchanges or implement the new insurance rules according to the standards in the new law (and subject to further interpretation by federal regulations), then the federal government will step in and perform those functions.

Starting in 2014, all families with income up to 133% of the federal poverty level (about $29,000 for a family of four in 2009) will be eligible for Medicaid, with the vast majority of the additional cost paid for by the federal government. The expansion in eligibility will be a required element of every state Medicaid program. States are not required to have Medicaid programs, though all states currently do, in large part, because the federal government pays the majority of the costs.

States , Insurance , Medicaid and CHIP