BOISE — With the 2012 session half over, opposition from the Legislature’s conservatives has all but ended Gov. Butch Otter’s plan for using a $20.3 million federal grant for a state-run insurance exchange required by Congress’ health care overhaul.

Discussions between legislators, Otter and the insurance industry have shifted toward a state-run exchange created without federal money, but that’s sufficient to reassure U.S. Department of Health and Human Services officials Idaho isn’t ignoring them, The Associated Press reports.

This approach walks a thin line between practical and political considerations: Doing enough to keep Washington, D.C., bureaucrats from imposing a federal exchange on Idaho, while letting “Obamacare”-loathing legislators tell constituents they didn’t bend to the hated federal government.

Democrats fear spurning the federal cash is tantamount to Idaho cutting off its nose to spite its face.

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