NASHVILLE (AP) - Tennessee is prepared to implement requirements under the federal health care overhaul in the event the Supreme Court upholds the law championed by President Barack Obama, despite serious resistance among Republican lawmakers to lay the groundwork for the program.

Republican Gov. Bill Haslam's administration has made steady progress on establishing the health insurance exchange required by the law. The governor initially pressed lawmakers to take final action on creating the exchange earlier this year, but it soon became clear that the GOP majorities in the Legislature did not want to vote for something that might be overturned by the courts or by the elections in November.

The governor later agreed that changes in the law could wait until January if they are still necessary.

The nation's highest court is expected to rule on a challenge to the health care law on Thursday.

"I think we've played this right, in the sense of being ready either way it goes," Haslam told reporters this week.

A rival effort to have Tennessee join an interstate compact challenging the federal health care law failed on the last day of the legislative session in May because 28 House members were either absent or abstained on the vote. The legislation would have provided a waiver for each participating state to create its own health care system.

Haslam said cost concerns are the main reasons he wants the law struck down.

"Obviously I'm hoping that they do, because I think it saves the state money long term, and that will make things easier," he said.

Haslam said he has consulted with TennCare Director Darin Gordon, who has assured him that even If the law is upheld, the state wouldn't have to take any significant action until January. That would leave time for Republicans to roll back the changes depending on the outcome of the November elections.

"There's really nothing we'd have to change or decide or spend money on between now and November that would be a difference-maker," he said. "It's really not until next January that we're at another decision point on having to spend money."

Based on 2010 U.S. Census Bureau data, about 930,000 people, of 15 percent did not have health insurance coverage.

Tennessee has run a healthy surplus in state revenues this year, but Haslam and Republican lawmakers have refused Democratic demands to use the money to defray tuition hikes and the state sales tax on groceries on the basis that they want to have reserves on hand in case they have to pay for health care increases under the federal law.

Haslam said the state has already begun to experience an uptick in prescription drug costs, which he attributed to the new health care law.

"I think that was providers starting to take into account, what are we going to do when we have to cover more people," he said.

"There's just a lot of inherent cost sin the new health care act that is just now beginning to show up and accelerate," the governor said. "My concern is that we didn't fix health care costs, which is the issue, we just expanded who was covered."