Unfortunately, health care exchanges cannot operate effectively under the matrix of the Obama administration's health care law. Much like pushing a round peg through a square hole, exchanges cannot offer market-based flexibility in a structure that is dominated by federal bureaucracy and government regulation. When simple decisions — like the format of an exchange website — require approval from D.C., it is clear that the federal government will run roughshod over the states.

Our Legislature is considering two bills, LB 835 and LB 838, that would create an exchange. Proponents, notably Omaha State Sen. Jeremy Nordquist, argue that an exchange would provide greater flexibility in implementing the new federal mandates.

The facts do not support this contention. Decision-making rights, not only for initial approval but also for all subsequent decisions, would be retained by the secretary of Health and Human Services.
Passing an exchange is simply embracing the implementation of President Barack Obama's health care law. There are serious doubts as to whether the federal government will be ready to implement the Affordable Care Act by 2014 — assuming the U.S. Supreme Court does not rule the law unconstitutional.

Physicians organizations, such as the American College of Surgeons, argue that many provisions of the law will not be operational.

Among the concerns, there are doubts that new reporting structures for providers and changes to Medicare's physician fee schedule will be resolved in time. Some provisions within the law — such as the CLASS Act, which is intended to implement a national program to enhance long-term care for seniors — have been scrapped because, as HHS Secretary Kathleen Sebelius admits, "we have not identified a way to make CLASS work at this time."

More disconcerting to the consumer is the federal bureaucracy being tasked with defining what constitutes "comprehensive" health insurance coverage. This had been the role of the states, but it is now a federal prerogative that will only make insurance more expensive.

The pharmaceutical industry spent more than $26 million lobbying on behalf of Obama's reforms. Big Business can now lobby government regulators to deem their products "necessary" to a comprehensive policy.

According to the independent Congressional Budget Office, average premiums under the new law will be "27 percent to 30 percent higher because a greater amount of coverage would be obtained." The report estimates that these higher costs are due to a "wider range of benefits," i.e., the new mandates that special-interest lobbyists want included in HHS rules.