The milestone health reform decision awaiting Minnesota's next governor and the new Republican-majority Legislature is clear. The state can design its own version of the online insurance shopping sites that will be a key pillar of federal health reform, or it can cede that authority to distant bureaucrats in Washington.

Although the sites, called health care exchanges, won't be operational until 2014, decisions need to be made soon about what approach the state's exchange will take. Those weighing in should be absolutely clear on this: If the state does nothing, the feds will step in two years from now with a one-size-fits-all approach. Minnesota will then have a year to get the federally outlined exchange up and running.

The sensible solution, especially for those who campaigned against "government takeover of health care," is for Minnesotans to design their own exchange. That's even more true in a state frequently singled out for its high-quality care, low uninsured rates and innovative programs. The state's providers and its nonprofit insurers are world-class. Its policymakers are nationally respected. Why not draw upon the deep expertise here to design a site that works best for the thousands of Minnesotans who will rely on it to buy their health insurance?

Not everyone will be eligible to buy through the exchanges, at least initially. Exchanges are aimed at those buying insurance for themselves and small-business employees, and will allow them to comparison-shop for coverage. The exchanges are also expected to help people determine their eligibility for federal subsidies to buy insurance.

Continuing to thumb the state's nose at "Obamacare," an approach embraced by outgoing Gov. Tim Pawlenty, is misguided and costly. Along with Alaska, Minnesota is one of just two states that did not apply for up to $1 million in federal grants this year to fund planning work on its state-run exchange, even though legislative work groups are delving into this. There were hopes that Minnesota could still apply for first-round planning money after a new governor takes office, but this week U.S. Department of Health and Human Services officials told an editorial writer that this is not an option.

However, there will be a second round of exchange planning grants opening up, likely in February; other grants may also be available. Minnesota will be eligible to apply for the second-round money, officials said. So far, it's not yet been determined how much may be available. But when the state faces a $6.2 billion projected budget deficit, everything helps. The new governor will need to ensure that the state promptly requests the money and that any ground lost this past year in exchange planning is made up.

Among the key decisions about the exchange that should be made in Minnesota are what insurance plans will be allowed to be sold, how provider networks will be structured, how the exchange will be marketed, and how existing programs, such as the state's high-risk insurance pool, will be handled. Border issues, such as for those who work in Minnesota but live in Wisconsin, should also be decided here.

The painful long-term budget outlook should be a top consideration for the new governor and lawmakers, who will need to pass enabling legislation to set up the exchange. An intelligently designed site could help bring down soaring health care costs by prioritizing plans that deliver high-quality, affordable care. There also may be opportunities for administrative cost savings -- for instance, if the exchange were to help users determine Medicaid eligibility, reducing paperwork.

Congress gave states the authority to design their own exchanges. Minnesota must capitalize on its expertise, not surrender its prerogative to customize this groundbreaking component of health care reform.