Earlier today, Governor Schwarzenegger signed two key bills to set up a new health insurance exchange, allowing California to be the first state in the nation to take this central step of implementing the new federal health reform law.
AB 1602 (Perez) and SB 900 (Alquist/Steinberg) are companion bills. The bills establish a new health insurance Exchange as required by the federal health reform law. In 2014, the new Exchange will be the new one-stop shop for getting health coverage for individuals and small businesses, both providing easy-to-compare choices, access to federally-funded subsidies to make coverage affordable, and the bulk purchasing power (similar to large employers or CALPERS) of millions of Californians to bargain for the best price and value.
Californians should be proud of this first-in-the-nation measure to implement health reform by setting up a new exchange, which will be a one-stop shop for consumers to easily compare plans and purchase health coverage, and get subsidies to ensure affordability. Many states are moving with determination to set up their exchanges in early 2011, but our legislative calendar required us to move quicker. With the signing of this bill, Californians will be positioned to be ready on day one to take advantage of billions of dollars in new tax credits and subsidies to help families and small businesses afford coverage.
The bills allow millions of Californians to pool together to bargain for the best price and value with the insurance industry, as opposed to the current individuals market where consumers and small businesses are left all alone at the mercy of the big insurers. Those insurers who opposed these bills profit from the status quo; This gives new power to consumers and small businesses.
This is a big step to a better health care system.
An estimated 3-4 million or more Californians who will be eligible to participate in the exchange starting 2014 (and more in future years as larger employers are allowed to join in).
AB1602(Perez) sets up the exchange. SB900(Alquist/Steinberg) sets up its governance. SB900 has passed both the Assembly and the Senate, and heads to the Governor’s desk. AB1602 has passed the Senate and goes to the Assembly for concurrence, before also heading to the Governor’s desk.