The health care exchanges are designed to help consumers find affordable coverage by 2014.
The federal government on Thursday approved Minnesota's plan for an insurance exchange under the new health care law.
The conditional approval was a necessary step in Minnesota's effort to build and operate its own exchange, a key part of the Affordable Care Act, by a 2014 deadline. States that decline or are unable to establish exchanges will use one designed by the federal government.
"This designation gives us added affirmation to move forward to the next step of working with legislators to pass a bill early in the 2013 session," Minnesota Management and Budget Commissioner Jim Schowalter said in a statement.
The exchanges, or marketplaces, will enable consumers and small businesses to compare online or by phone the costs and options among a variety of private health insurance plans. More than 1 million Minnesotans are expected to use the exchange to buy coverage, including people who are eligible for tax credits to help make premiums more affordable.
Minnesota was one of three states whose exchanges were conditionally approved on Thursday. The others were Delaware and Rhode Island, according to the U.S. Health and Human Services Department. Eight states and the District of Columbia won approval for exchanges last week.
Most of the exchanges approved so far, including Minnesota's, are state-operated. The Delaware plan is the first state-federal exchange to be approved, the department said in a news release.
"States across the country are working to implement the health care law and build a marketplace that works for their residents," Health and Human Services Secretary Kathleen Sebelius said in a statement.
Minnesota has received $70.3 million in federal aid to help it plan and build the new marketplace for affordable health insurance coverage. The state has applied for an additional $39 million for technical infrastructure and business operations, and expects to know by the end of the month whether the grant will be forthcoming.
The state has hired a vendor to build the technical backbone of the exchange, which supporters say will operate like an online travel site. By midsummer, the public could have a chance to test drive an exchange site, Exchange Executive Director April Todd-Malmlov said.
With conditional approval in hand, the next step will be to work through difficult issues of financing, the role of brokers and determining what kind of governance structure will be set up to oversee the exchange.
Legislators will need to get a bill passed by the end of March, "not a small task," Todd-Malmlov acknowledged.
By September, the federal government will take another hard look at the state's effort to determine whether Minnesota will be ready to enroll people in plans through the exchange on Oct. 1.