Legislation that would establish a marketplace where insurance for 1.3 million state residents is expected to be purchased cleared its first legislative hurdle on Wednesday. The health care exchange bill passed out of the Senate Committee on State and Local Government on a 7-5 party-line vote.

A bipartisan group of legislators unveiled a bill on Wednesday to create a state-administered marketplace where individuals and corporations will be able to purchase health insurance. Minnesota must enact such legislation by the end of March in order to be in compliance with the federal Affordable Care Act, which will be fully implemented in 2014.

For casual observers outside Minnesota health care policy circles, the health insurance exchange that’s being pursued under the strictures of President Barack Obama’s Affordable Care Act appeared to be a collaborative process. At least until recently.

In the past, Dayton has said his administration has the authority to move forward on an exchange, a process that he has delegated to a broad task force charged with making recommendations and studying its implementation.

In a report Wednesday, the White House highlighted Minnesota's efforts among nine other states as examples of the diverse approaches being taken across the country.

Hann's statements stand in contrast to a news conference he and GOP colleagues held in August in which they accused the administration of overstepping its authority in establishing a health care exchange.

On the hot-button subject of the state insurance exchanges mandated by the 2010 federal health care law, Minnesota Citizens Concerned for Life (MCCL) has put itself at odds with a broad swath of conservatives who oppose what they call “Obamacare” in all its manifestations.

The two panels, one charged with overseeing health care reform initiatives and another that will work on a health insurance exchange, will include members academic, industry, advocacy interests along with lawmakers.

Legislative Republicans accused the Dayton administration of acting outside its authority, saying they're weighing every option to halt the implementation, including court action.