Related Story: Fallin says no to state health exchange

The decision means Oklahoma will not do anything to accommodate the federal health-care law known as "Obamacare." It also means the state will skip an opportunity to help some 693,000 uninsured Oklahomans, 18.7 percent of the state population, get coverage through the federal government.

"After careful consideration, I have today informed U.S. Secretary of Health Kathleen Sebelius that Oklahoma will not pursue the creation of its own health insurance exchange," Fallin said. "Furthermore, I have also decided that Oklahoma will not be participating in the Obama administration's proposed expansion of Medicaid."

Any exchange that is compliant with the federal health-care law would necessarily be state-run in name only and would require Oklahoma resources, staff and tax dollars to implement, Fallin said.

"It does not benefit Oklahoma taxpayers to actively support and fund a new government program that will ultimately be under the control of the federal government, that is opposed by a clear majority of Oklahomans and that will further the implementation of a law that threatens to erode both the quality of American health care and the fiscal stability of the nation," she said.

Medicaid expansion could cost the state up to $475 million between now and 2020, with escalating annual expenses in subsequent years, Fallin said.

The Affordable Care Act promises that 100 percent of the cost of newly eligible Medicaid patients would be federally funded for the first three years, but Fallin said economic realities put that promise in doubt.

"The federal government's broke," Fallin said in an telephone interview with the Tulsa World. "Just because the federal government says they may do something in the future, even with Obamacare, doesn't mean it's going to be there because that fact is we have a huge deficit and a big fiscal crisis in our nation."

Expanding the state's Medicaid program would come with some state expenses, and that is money that won't be available for other priorities, including education and transportation, she said.

"I can't print money, unlike the federal government," Fallin said. "I have to balance our budget. I have to live within our means."

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Fallin rejects health-care exchange