In a state as regulation-heavy as California, a fight between profit-destroying bureaucrats and rent-seeking crony capitalists is what passes for public debate on how best to distribute the good of health more evenly across the population.

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Federalism and the free market don't always go together, especially not in a Nanny-state like California.

Evidence is mounting that continued centralized control over issues like education and the environment erode state and local power under the Constitution. This week comes news of a fight brewing between Covered California - the local ObamaCare health insurance exchange – and Dave Jones, the state's Insurance Commissioner.

Jones wants the same power over health insurance rates as he currently wields over car and homeowners insurance. Like other bastions of liberalism, California law makes auto and homeowners insurance companies justify rate increases to the satisfaction of the state regulator. Fail to persuade the watchdog, and rates can't rise.

Not so with health insurance. Under ObamaCare, health insurance rates are negotiated between Covered California and each of the 11 companies offering plans on the exchange. Officials at Covered California claim they get the best value for the lowest possible rates, but Jones isn't convinced.

"Health insurance rates have increased more than 150 percent in California in the last decade, a figure greater than five times the rate of inflation," Jones told the Sacramento Bee.

And because of ObamaCare's regulatory structure, he doesn't see that cost curve bending down any time soon.

The Achilles Heel of ObamaCare, according to Jones, is that even with all of the law's mandates, it still gives health insurance companies too much clout. Only four of the 11 companies selling plans through Covered California do so statewide, giving those four companies access to 90 percent of the in-state market.

However, in many places only one of those companies offers coverage. Recall that ObamaCare's subsidies are only available to pay for plans purchased on a state-based exchange. So, if you're a subsidy-eligible Californian living in a low- or no-competition area, you're basically forced to buy health insurance from an ObamaCare-approved provider, at whatever price is available.

This amounts to a windfall for insurance companies aligned with Covered California.

 "We've given them a legal monopoly," Jones says. "Now, by law, everyone has to buy their product."

To guard against "excessive rates," Jones wants California voters to approve Proposition 45, a statewide ballot measure he is sponsoring that would give him the authority to impose rates lower than those negotiated between Covered California and its insurance companies.

Without using the word, Jones sounds a "federalism" tone in his insistence that California go the way of 35 other states that give their insurance commissioners the power to police health insurance rates. After all, the power to regulate matters related to public health has traditionally been one of the basic, general responsibilities of state and local governments. If a state like California decides that government rate-setting serves the common good, then it's within its authority to do so.

This is just one example of how respecting federalism - the right of states to make their own judgments in policy areas not specifically delegated to the federal government - does not necessarily result in less government, let alone a market free of government intrusion.

It's deeply ironic that the main source of opposition to Jones' Prop 45 campaign is an alliance between federally-aligned central planners at Covered California and the insurance companies they regulate. Covered California doesn't want the regulatory competition, and insurance firms don't want any more competition than minimally necessary to make a profit.

In a state as regulation-heavy as California, a fight between profit-destroying bureaucrats and rent-seeking crony capitalists is what passes for public debate on how best to distribute the good of health more evenly across the population. It's also how the once Golden State gets more tarnished by the day.