The clock is ticking on the implementation of the Affordable Care Act (ObamaCare) among the 50 states.  Heavy pressure from the Obama administration is focused on convincing states to establish their own health insurance exchanges under the law, in order to gain some measure of state control over the operation of the exchange. 

The exchange is the "front door" of ObamaCare.  It is designed to look like a marketplace, where folks can shop for health insurance from a group of approved insurers.  In reality, it is a carefully orchestrated faux market, where people will all buy the same federally approved product, albeit with different-colored wrapping paper.

Let me make this unequivocally clear: the idea of states having any control over the operation of these exchanges is a fiction, adroitly peddled by those in line to gain handsomely from the exchanges themselves.  Any exchange set up by a state must provide all the same offerings, follow the same rules, and operate in the same manner as an exchange established by the federal government itself.

The legislation is quite clear in this regard, and this point is reiterated in the recently released implementing regulations from the Department of Health & Human Services, which states, "The Affordable Care Act does not contemplate divided authority over an Exchange."

So why would insurance companies and other organizations tell policy-makers and the public that a state exchange is the way to go?  Aside from receiving hundreds of billions of dollars in taxpayer subsidies, they also get to dominate the discussion once the exchange is launched. 

According to Kaiser Health News (emphasis mine),

Insurers and other industry representatives will get to fill as many as half the seats on the governing boards for state health insurance exchanges, under final rules for the marketplaces issued by the Department of Health and Human Services. At least one seat must be reserved for a consumer representative.

The composition of governance for federally established exchanges is based upon a different set of rules --  rules that do not place insurers on nearly as high a pedestal and do not provide for a penny's worth of tax-subsidized premiums.  From the perspective of an insurance company executive, the state exchange model is a no-brainer. 

However, from the perspective of the hundreds of millions of us who will be forced to live under such an arrangement, establishing a state exchange makes as much sense as asking your dog to watch your steak for you while you run to the bathroom.  Nevertheless, the proponents of ObamaCare persist in the narrative that setting up a state exchange will enable us to avoid federal interference.  By now, it should be clear to the reader that this narrative is decidedly disingenuous.

The ACA, in Title I, Part III, Sec. 1321-1330, lays out the level of flexibility offered to states in this regard.  It takes nine sections to tell states they may do anything they please, as long as they first do everything the federal exchange will do.  The only deviation allowed from the federal model is to add additional services to the over-stuffed benefit package already required under the ACA.

The Heartland Institute of Chicago warns us that even the "final rules" for the exchanges are not actually "final."  They do not explain all the requirements necessary for an exchange to meet with federal approval.  Under the law, each state must submit its exchange plan to the Secretary of Health & Human Services, Kathleen Sebelius, for final approval before the plan will be allowed to operate.  Several states have submitted exchange plans already, only to have them rejected.

With the requirement of a federal imprimatur for any state-established model, the "threat" of instituting a federally run exchange means simply that should we choose not to set up an exchange, the feds will do for us precisely what they would have required of us -- except at their sole expense.

This, of course, assumes that the federal government can set up anything at all.  They have no appropriation for establishing federal exchanges, and the GOP-controlled House of Representatives certainly isn't interested in bailing them out of that pickle.  Section 1311 of the ACA provides for premium subsidies to insurance companies in state exchanges only.  No such funding mechanism exists for a federal exchange, leaving the feds unable to offer the billions of dollars of taxpayer-funded subsidies needed to purchase insurance company support.

Let's assume, for the sake of argument, that the Obama administration decides to ignore the law (what a stretch!) and distribute subsidies on a federal exchange anyway.  This would create an actionable breach of the law, and those affected by it (employers within the state) would have standing to sue.  But that benefit is out the window if a state sets up an exchange.

Exchanges are the new government bureaucracies through which millions of Americans will be compelled to purchase ObamaCare's overpriced and overregulated health insurance. Through these bureaucracies, insurance companies will receive hundreds of billions of dollars in taxpayer subsidies. Without these bureaucracies, ObamaCare cannot work.

This statement from the Cato Institute lays bare the fiction that ObamaCare is inevitable.  Indeed, the ACA perches precariously on a ledge, peering into an abyss of its own making.  By relying on the states to do all the heavy lifting in setting the keystone of ObamaCare in place -- the exchange -- they neglected to devise a contingency plan in case the states rejected this mother of all unfunded mandates.

In my state of Nebraska, our governor, Dave Heineman, has made it clear that he has no intention of setting up any exchange before the election, in case Romney wins, and no exchange is needed.  However, he hasn't been as clear on whether he would veto the establishment of a state exchange in the event that Obama retains his office. 

He is under tremendous pressure from insurance lobbying groups, as well as hospital groups and the usual leftist suspects who predictably fall in line behind every expansion of government.  The pressure isn't limited to the governor though, as state legislators are being lobbied hard to overwhelm the governor's stand. 

The choices could not be framed more starkly.  Those who suggest we move forward on a state exchange now are ignoring the effect such a move will have on the citizens of Nebraska, and their insistence on clinging to the debunked fiction of "state control" serves only to further illustrate the deeply mercenary intent behind their serial misinformation. 

The bold truth is that moving ahead at this stage, with the incomplete information presently available, is wildly irresponsible, entirely indefensible, and akin to handing the federal government a blank check to our state treasury.

There is nothing to be gained for our state (or any state) by doing for the Obama administration that which it cannot do itself.  The arrogance that precipitated the ham-handed mandates of the ACA and the deafness of the administration to our complaints have come full circle.  As the Reverend Jeremiah Wright might say, "Obama's chickens have come home to roost."

No state exchange, no ObamaCare.  Some things are just that simple.

The author writes from Omaha, Nebraska and welcomes visitors to his website at www.readmorejoe.com.