May 21, 2012 5:25PM # How to Recognize a Government Contractor, or a Federal Takeover By [Michael F. Cannon](https://www.cato.org/people/michael-f-cannon) --- SHARE Here’s a poor, unsuccessful letter I sent to the editor of the *Washington Post*: > “[GOP stalls on insurance marketplaces](http://www.washingtonpost.com/national/health-science/republican-state-officials-stall-on-setting-up-health-insurance-marketplaces/2012/05/12/gIQA9yDGLU_story.html)” \[May 12\] reports that “the conservative firm Leavitt Partners…is working with a number of states on their plans” to create the government bureaucracies that the new health care law calls insurance “exchanges.” > > > The article should have informed readers that this “conservative firm” (whatever that means) is a for-profit government contractor that makes money by helping states create those exchanges, and is acting against the advice of the nation’s leading conservative think tank. The Heritage Foundation [counsels](https://www.cato.org/heritage-scholar-urges-states-dont-implement-obamacare-exchanges-send-back-grants/) states not to create exchanges, and to send all related funds back to Washington. > > > Finally, the article claims states can avoid a “federal takeover” by creating an exchange. On the contrary, the law requires state-run exchanges to obey all federal edicts, just as a federal exchange would. The federal takeover has already happened. States that create their own exchanges merely pay for the privilege of losing their sovereignty. ##### Related Tags [General](https://www.cato.org/general), [Government and Politics](https://www.cato.org/government-politics), [Health Care](https://www.cato.org/health-care) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).