Gov. Mark Dayton told legislative leaders Tuesday that he will seek federal approval to move forward on a Minnesota-made health insurance exchange, but he sought to assure Republican opponents that he will defer important policy decisions until after the November election.

Dayton also said he was shifting responsibility for leading the "next phase" of the exchange to a new state agency. The actions are a sign of continued movement to set up a state-run exchange, a key component of President Obama's health care law. The exchanges are scheduled to launch nationwide in 2014 and aim to be competitive marketplaces for individuals and small businesses to comparison shop for health insurance.

"While the Affordable Care Act continues to be debated in the political arena, the law is clear: either we design and implement a state-based exchange, or we will be assigned to a one-size-fits-all federal exchange," Dayton said in a letter to the legislators.

More than 1.2 million Minnesotans are expected to be eligible for the exchange, which supporters say will make buying health insurance as user-friendly as shopping for an airline ticket on a travel website.

The state has received $28.5 million in federal grants to hire staff and lay the foundation. It has applied for another $42.5 million to build the technical infrastructure.

States have until Nov. 16 to submit paperwork to the federal government to prove they will have a functioning exchange by the Oct. 1, 2013, open enrollment period.

While a Minnesota-designed exchange has the support of the Minnesota Chamber of Commerce and some key Republican leaders, it does not enjoy full bipartisan support. Lawmakers were unable to get an exchange bill out of committee during the previous two legislative sessions, and Dayton has signaled he will use his authority to move forward without legislators, if need be.

Dayton seemed to soften that stance in the letter Tuesday, emphasizing in bold type that he would "not commit Minnesota to any final policy decisions in the application," including how the exchange will be financed and whether it will be governed by the state, a nonprofit agency or a combination.

"I respect the authority of the Legislature to participate in these decisions, and strongly prefer that we all work together to make these crucial choices," he said.

Dayton said he will give the reins to Minnesota Management and Budget to begin scaling up the effort and dealing with what promises to be a more complex and turbulent period where battle lines about how the exchange will work will become more clear.

Minnesota Management and Budget Commissioner James Schowalter has served Republican and Democratic administrations.

Until now, Commerce Commissioner Mike Rothman has spearheaded the effort. Brokers and some businesses have raised concerns recently that the process hasn't been transparent enough. Dayton's letter said the move would address concerns that the Commerce Department, which regulates the insurance industry, shouldn't also be involved in building core functions of an exchange it will oversee.

Dayton's chief of staff, Tina Flint-Smith, acknowledged the concerns about conflicts with the Department of Commerce and said, "We listened to that."

Jackie Crosby • 612-673-7335