On Wednesday, California's Legislature gave final approval to the second of two bills to establish the California Health Benefit Exchange, paving the way for California to become the first state in the nation to create a health insurance exchange under the federal health reform law, the Wall Street Journal reports.
The health reform law calls for the creation of insurance exchanges to provide coverage options for individuals and small businesses. The exchanges are required to be fully operational by January 2014 (Wilde Mathews, Wall Street Journal, 8/26).
Action on Two Bills
Earlier this week, the Legislature approved SB 900, by Sen. Elaine Alquist (D-Santa Clara), which would set up the state's insurance exchange to help consumers compare information about insurers before choosing a health plan.
The second bill, AB 1602 by Assembly Speaker John Pérez (D-Los Angeles), would delineate the duties of the exchange (California Healthline, 8/25). The Assembly voted 51-27 to approve AB 1602 (AP/San Jose Mercury News, 8/25).
Both measures now go to Gov. Arnold Schwarzenegger (R), who is expected to sign them. If Schwarzenegger signs the legislation, California would be the first state in the nation to establish a health insurance exchange under the reform law.
Details on California's Exchange
California's health benefits exchange is likely to be the largest exchange operated by a single state, with as many as 8.3 million residents expected to be eligible for coverage.
The exchange will provide consumers with a marketplace of insurance plans through a website that will provide standardized, detailed information about the plans and offer a toll-free number to help consumers understand their options.
In accordance with federal requirements, California's exchange will offer health plans in five categories, ranging from catastrophic coverage for young adults to high-end plans with extensive benefits. The exchange also will provide resources to connect eligible Californians to federal subsidies for health coverage or government programs such as Medicaid.
The state plans to authorize a new board to govern its insurance exchange and selectively contract with insurers.
Other State Plans
Although California would be the first state to establish a health insurance exchange under the federal health reform law, both Utah and Massachusetts already have pre-existing insurance exchanges.
Iowa is in the process of creating a new information-only exchange (Wall Street Journal, 8/26).