SACRAMENTO (CBS/AP) — The federal government has approved California’s plan to run its own health insurance market, a milestone in the state’s effort to meet the national health care reform law.

U.S. Health and Human Services Secretary Kathleen Sebelius announced Thursday that California was among seven new states that received conditional approval to operate their own insurance exchanges. Arkansas was approved to operate a partnership exchange with the federal government.

California was the first state to authorize a health insurance exchange after passage of the federal Affordable Care Act in 2010.

The California Health Benefit Exchange board, which now goes by Covered California, submitted its operational plan last month to expand coverage by at least 2 million. The state has about 7.7 million people without health insurance.

(Copyright 2012 by CBS San Francisco. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)