SIOUX FALLS | The state of South Dakota will allow insurance companies to decide whether to let customers keep health plans that otherwise would be canceled under the federal health care law.

The Division of Insurance made the announcement Tuesday in response to President Barack Obama's decision to give companies the option of extending policies for one more year. The state still had to approve the changes.

It affects a few thousand South Dakotans who are due to lose their existing policies.

Avera, Sanford and DAKOTACARE are approved to offer plans on the exchange in South Dakota.

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Sanford says it will reinstate the policies that were due to expire.

DAKOTACARE says it will give people and groups the option of keeping their plans or going with the exchange.

Avera couldn't immediately be reached.

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