Reality #3 – Obama's Bluff - the "Federal Health Exchange"

Although language for a "federal" health insurance exchange exists in Obama's reform law, it's essentially a bluff. The federal government never intended to create it. They don't want to create it. They didn't even give themselves money to create it. 

The real plan is a NATIONAL exchange made up of one Federal Data Services Hub (central server) and 50 federalized website portals connected to the Federal Hub—one for each state. The Federal Hub enables massive amounts of personal data to flow from and between state and federal databases through Information Technology (IT) connections.  The Obama administration hoped state governors would just build the online IT connections for them—state by state. 
 
It's all about the funding. The distinction in terms—state exchange vs. federal exchange—relates primarily to who funds this intrusive IT (data exchange) superstructure. A "state exchange" is the term used when the state funds the website and IT connections from state agency databases to the Federal Hub. A "federal exchange" is the term used when the federal government funds the website and IT connections between the state agency databases and the Federal Hub.  If a state funds it, the state receives can use a federally-certified website portal with a state name and can create an "Exchange Board" to maintain the data flow and decide which health plans can sell insurance through the website. 
 
Obama's threat of a "federal exchange" was intended to drive states into building—and funding—the IT connections ("state exchanges").  So far, only 18 states and Washington, D.C. have obliged. They are building the IT connections from state agency databases to the Federal Hub which is connected to the databases of at least five federal agencies. These states are building their part of the national exchange in their corner of the U.S. 
 
Proponents regularly claim in testimony and to the media that it's better to have the state build a "state exchange" than to have the federal government impose a "federal exchange." But as Texas Governor Rick Perry said in his letter to the Secretary of HHS: 
"It is clear there is no such thing as a state exchange. Instead, this is a federally mandated exchange with rules dictated by Washington. As long as the federal government has the ability to force unknown mandates and costs upon our citizens, while retaining the sole power in approving what an exchange looks like, the notion of a state exchange is merely an illusion." (Nov. 15, 2012, Emphasis added.)
Regardless of who funds this national superstructure for data exchange, the entire enterprise will be under federal law and beholden to thousands of pages of federal rules. It's a national system.
 
Just think of it as having someone in Washington D.C. who knows all about you with the power to limit your health insurance options instead of having your personal privacy protected and a full set of insurance options from the health insurance companies in your state.