Gov. Arnold Schwarzenegger has signed two bills that he touts as reforms to "provide affordable and quality health care insurance." In reality, Senate Bill 900 and Assembly Bill 1602 create a new bureaucracy — outside the normal controls of even the governor and state Legislature — to dictate which insurance companies may sell to California consumers and small businesses, what prices they must charge and what coverage they must provide.

Sally Pipes, president of the Pacific Research Institute, a free-market think tank in San Francisco, says that the state-run exchange essentially will act as the administrative arm of the federal government, which will dictate how to operate under the federal health plan's thousands of pages of new regulations, even further removing health care choices from local consumers.

California is the first state to set up insurance exchanges, which aren't required until 2014. Rushing to create them compounds the problem. Should President Barack Obama's health care legislation be repealed, as Republicans vow to do if they gain control of Congress in the November election, California still will be stuck with state government-run exchanges and all their inherent problems.

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