The exchange is required in each state as part of the Affordable Care Act.
If Michigan, or any other state, refuses to set up its own exchange, the federal government will do it for them.
The bill to create a Michigan exchange passed in the State Senate, but Republican leaders in the House have refused to vote on it.
In doing so, they're passing up $10 million in federal funding.
The exchanges are meant to set up a competitive marketplace for people and businesses to shop for the most affordable insurance.
Governor Snyder says it's unfortunate that the federal government may now call the shots for Michigan, but Republican leaders in the House remain hopeful that Mitt Romney will win the election in November and repeal the Affordable Care Act.