On Jan. 3, California received conditional approval from the federal government to set up a health insurance exchange, which will enable residents of Tracy and the rest of the state to compare insurance plans and prices.

Every state must either set up an exchange or cede that task to the federal government as part of the Affordable Care Act — sometimes called Obamacare after President Barack Obama, who promoted the law. It was passed by Congress in March 2010.

According to the law, every U.S. citizen must have health insurance by 2014 or face individual penalties of up to $695 per year.

The exchange will help residents meet that mandate, according to Josefina Notsinneh at Ogilvy Public Relations, who responded to a request for comment directed to the California Health Benefit Exchange administration.

Notsinneh explained in an email that the state exchange is a government-regulated marketplace that will “make it easier for … individuals and families and small businesses to get access to health coverage options.”

California residents who do not have health insurance through an employer, Medicare or Medicaid can buy insurance through the state’s exchange.

The exchange, Notsinneh wrote, will give people easy-to-understand information about competing insurance plans and various federal subsidies. In theory, that should allow each individual to pick the most affordable and appropriate option.

According to Karen Garner, a spokeswoman for Sutter Health, which runs Sutter Tracy Community Hospital, the exchange is supposed to “make buying health coverage easier and more affordable” for residents.

“We expect the California insurance exchange to be a competitive and popular marketplace for lower-cost health insurance,” Garner wrote in a statement.

The California Health Benefit Exchange has estimated at least 1.8 million California residents will buy subsidized insurance through the exchange. An estimated 1.5 million more state residents will be eligible for coverage under the Affordable Care Act’s expansion of Medicaid, an insurance program for the poor.

Notsinneh wrote in an email that California residents will be able to purchase insurance through the exchange starting Oct. 1, in time to meet the Jan. 1 deadline for acquiring insurance.

Access to the exchange will be available online through the Covered California Web portal, which is under construction, Notsinneh wrote.

• Contact Jon Mendelson at 830-4231 or jmendelson@tracypress.com.