01/11/2013 12:07 pm ET Updated Dec 06, 2017

Utah Obamacare Showdown Is Test For Federal Health Officials

President Barack Obama wants as many states as possible to run health insurance exchanges under his health care reform law. Utah already has a health insurance exchange and wants to keep it.

At first glance, it might look like Obama and Utah Gov. Gary Herbert (R) are on the same page. Not really.

Herbert, like almost every Republican politician, opposes Obamacare. Moreover, Utah's existing exchange currently serves only small businesses whereas Obama's health insurance exchanges are supposed to also sell health plans to individuals. Utah says it plans to expand its exchange, called Avenue H, but officials there don't seem keen to do things Obama's way.

Nevertheless, the Obama administration last week gave conditional approval to Utah's health insurance exchange. The question is: Who will blink? Will Herbert agree to the major changes demanded by the Department of Health and Human Services or will federal officials bend to Utah, sending the message that they're serious about giving states flexibility while also signaling they're willing to compromise on the president's health care agenda?

Stateline lays out the stakes in a story published Friday.

The Obama administration has a strong interest in convincing red states to establish their own, tailor-made insurance exchanges keyed to their particular needs. To that end, the U.S. Department of Health and Human Services has vowed to give states as much leeway as possible. Utah is a test of that commitment.

With 25 states, all but three of which have Republican governors, opting out and letting the federal government build and operate health insurance exchanges in their states, the Obama administration has a huge incentive to get Utah on board. Utah would be among just 18 states and the District of Columbia that would run its own exchange under the health care law -- and one of only five with a GOP governor. (This includes Mississippi, which may not do a state-run health insurance exchange after all.) The remaining seven states plan to partner with the federal government.

To get to yes, though, Utah would have to do some things it doesn't appear eager to do, Stateline reports.

The problem for Utah is that the agency's approval came with a long to-do list. "That wasn't what we wanted to hear," says the governor's exchange chief, Patty Conner. "We wanted to hear that they would approve the exchange that we have. I think we have a different definition of flexible."

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Source: Henry J. Kaiser Family Foundation