The Senate Commerce and Human Resources Committee voted 8-1 on Thursday for the proposal, which is backed by Gov. C.L. "Butch" Otter.
It now goes to the full Senate.
Sen. Todd Lakey, a Republican from Nampa, said he despised "Obamacare."
Even so, he felt a state exchange like Otter proposes will give the Idaho more control and produce insurance products that are more affordable for residents.
Democratic Sen. Branden Durst of Boise was the lone "No" vote, arguing setting up an exchange with a largely independent board left the Legislature with too little oversight.