The Obama administration gave California's subsidized health care marketplace conditional approval Thursday as the state prepares to sign up subscribers in October.
The marketplace, dubbed Covered California, plans to serve hundreds of thousands of uninsured residents who are eligible in 2014 for federal subsidies to obtain health coverage.
Starting next year, all Americans are required to obtain insurance or pay a penalty under the 2010 federal health care overhaul.
California has received $237 million in federal grants so far to build its marketplace, which pays for a new IT system that enrolls subscribers statewide, marketing efforts and staff to operate the program.
Federal officials are watching California with particular interest, given that it is the most populous state and has unique language and cultural barriers among its uninsured population. To date, the federal government has approved so-called "health exchanges" in 19 states and Washington, D.C.