Opposition to Obama's signature domestic policy achievement has become a rallying cry among Republicans, with at least five governors saying they would not implement the law's expansion of the Medicaid program for the poor and handicapped.

With the U.S. Supreme Court upholding the law as constitutional earlier this month, Republicans are now focused on winning control of the White House and enough seats in Congress in the November 6 elections to repeal it.

Marilyn Tavenner, the acting head of the Centers for Medicare and Medicaid Services (CMS), wrote that states have no deadline for when they have to comply with the Medicaid expansion mandated under the new law, but should not waste "a good deal," according to a letter sent on Friday.

Medicare is the healthcare program for the elderly.

"We hope that states will not turn down the resources and flexibility offered in the Affordable Care Act (Obama healthcare law), and will put aside old political battles to move forward with implementation," she wrote in a letter addressed to Virginia Governor Bob McDonnell.

McDonnell is head of the Republican Governors Association.

In its ruling upholding the healthcare overhaul, the Supreme Court allowed states to opt out of the expansion of Medicaid, which is jointly funded by federal and state governments and represents the biggest spending item in most state budgets.

The expansion would raise the limit on annual income for eligible families, and aims to extend health coverage to 16 million Americans.

Some state officials are worried about a rise in Medicaid costs in the wake of the ruling, even with the government's commitment to fund the entire Medicaid expansion in the first three years and 90 percent of it thereafter.

In her letter, Tavenner was responding to concerns raised by McDonnell earlier this week. McDonnell wrote to Obama that he was also worried about the uncertainty surrounding the subsidized health insurance exchanges which must be set up as part of the law to extend health coverage.

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States that decline to submit plans for their own exchange by November 16 would require the federal government to step in and operate them, but McDonnell said it was unclear if the government will be ready or have the funds to fully implement the law when it takes full effect in 2014.

"We believe it is incumbent upon the authors of (the law) and your administration to detail precisely how you intend to address this situation," he said in the letter to Obama, which was sent on behalf of Republican governors.

McDonnell also included 30 specific questions about the Medicaid expansion and healthcare exchanges.

So far, 13 states have committed to establishing a state-based health insurance exchange, according to the U.S. Department of Health and Human Services. At the same time, 17 states have made no significant progress towards establishing an exchange or rejected the idea, according to the Kaiser Family Foundation, which tracks healthcare issues.

Some health experts fear many states holding off on exchanges will wait for the outcome of the November elections. Since building the technological infrastructure requires time, states that wait could be ill-prepared by the autumn of 2013 when the federal government wants the exchanges to accept enrollment.

CMS' Tavenner said the government was open to working with the states, and said they could apply for federal funding to implement exchanges or expand Medicaid. She said they would not have to pay the money back if they ultimately decided not to participate.

"We expect that, as states study their options, they will recognize that this (law) is a good deal," she said.

A spokesman for Virginia's McDonnell said Tavenner's letter did not address his questions specifically, but rather said more guidance will be issued later.

"That's exactly the problem," Jeff Caldwell, press secretary for Governor McDonnell, said in an email.

"Governors need that 'guidance' now in order to make decisions involving significant amounts of taxpayer dollars. We hope that this letter is merely a precursor to a much more substantive and thorough response in the weeks ahead."

(Additional reporting by David Morgan; Editing by Michele Gershberg and Todd Eastham)

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