Schwarzenegger signs major California health bills, paving way for federal reforms

By Robin Hindery, AP
Thursday, September 30, 2010

Schwarzenegger signs major health care bills

SACRAMENTO, Calif. — Gov. Arnold Schwarzenegger on Thursday signed seven major health care-reform bills, including legislation establishing a Web-based insurance exchange that will allow consumers to comparison-shop for coverage.

The governor’s action makes California the first state to implement an oversight board for insurance exchange marketplaces since the new federal health care law was enacted earlier this year. Massachusetts implemented its exchange prior to reform.

“For national reform to succeed, it will be up to the states to make it work, and California is moving forward on reforms that will provide affordable and quality health care insurance,” Schwarzenegger said in a statement.

The two companion bills, SB900 and AB1602, will promote competition in the health insurance marketplace that will make plans more affordable, particularly for individuals and small businesses, said Assembly Speaker John Perez, D-Los Angeles, the author of AB1602.

Additional bills signed Thursday prohibit insurers from denying coverage to children because of a pre-existing condition and allow young adults to stay on their parents’ health care plans until age 26.

The legislation aims to bring the nation’s most populous state in line with federal reforms scheduled to take effect in 2014.

“This will really give us a leg up and put us in a leadership role in the nation,” said Betsy Imholz, health advocate for Consumers Union, a major supporter of the reform package. “It’s a big job for California to set this up and do it right, and now we can take the time to set up a really model exchange that other states can look to.”

When fully enacted, federal law will require most Americans to carry insurance. More than 46 million Americans are currently uninsured, including more than 6.7 million Californians, according to the Henry J. Kaiser Family Foundation.

California’s exchange will be overseen by a five-member board. Schwarzenegger would appoint two members before his term ends and the Legislature would appoint the rest.

Republican lawmakers have argued that the federal government should take full responsibility for creating the exchange and that a state-run program could turn into an unaccountable bureaucracy.

Critics also have raised concerns that the exchange will further deplete the state’s general fund when California is already grappling with a $19 billion deficit.

The California Chamber of Commerce issued an analysis earlier this month concluding that the cost could exceed $1 billion annually. But a report by the state’s nonpartisan Legislative Analyst’s Office found that the exchange would be federally funded until 2016.

After that, the cost would fall to health insurers and potentially to their enrollees through premiums, the report said.

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