CA Governor signs health insurance exchange bill

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September 30, 2010

Schwarzenegger Signs Bill Creating Health Insurance Exchange for Consumers

Legislation Puts California Ahead of the Pack on Health Reform Implementation

SACRAMENTO, CA — Consumers Union applauded California Governor Arnold Schwarzenegger for signing into law two bills (SB 900 / Alquist and AB 1602 / J. Perez) that create the governance, structure and duties of a new Health Benefits Exchange. State health insurance exchanges are the marketplace where individuals and small businesses will go to purchase health coverage and are a cornerstone of the federal health reform law.
“California is the leading the nation by becoming the first state to create an insurance exchange since health reform was enacted earlier this year,” said Betsy Imholz, Special Projects Director for Consumers Union, nonprofit publisher of Consumer Reports. “The state’s new Health Benefits Exchange will provide consumers with an organized, transparent insurance marketplace where they can find high-value coverage and get subsidies to help afford it.
Under the health reform law, consumers will be required to obtain health coverage starting in 2014. The Exchange will serve as a “one-stop shopping center” where consumers can find the right insurance plan, compare plans based on cost and quality, sign up for coverage, be screened for public programs, and determine whether they qualify for subsidies or tax credits. The Exchange will be run by an independent, five-person state governing board with appointments by the Governor, Assembly and Senate. Public accountability is ensured by provisions in the law that make the Exchange meetings subject to the State’s open meetings law, and require public disclosure of key information and annual reports to the legislature.
“Starting the process now is critically important for California for two reasons,” said Imholz. “First, it will allow the state to maximize federal planning funds. Second, the Exchange will have a big job, with an estimated 2-8 million enrollees, many of whom will be applying for subsidies. The public outreach and administrative systems needed to get the Exchange up and running are substantial so we need to start now.”
Start-up funding for the Exchange will come from federal dollars, with renewable $1 million grants available for five years. By 2016, the Exchange will be self-sustaining through a charge assessed on participating carriers. No General Funds are at risk and its independent governance protects the state from liability.
“This legislation is the culmination of the Schwarzenegger Administration’s path to reform started in 2007,” said Imholz. “Many features of the comprehensive proposal that Governor Schwarzenegger and state lawmakers put forward ultimately found their way into the federal bill, including the same concepts we find in the Exchange.”
Michael McCauley – 415-431-6747, ext 126