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California Assembly OKs Health Care Reform Plan

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Health care legislation seeking to extend coverage to millions of California’s uninsured has been approved by the state Assembly by a 46-31 vote.

Assembly Bill 1X1 is the result of nearly a year of negotiations between legislative leaders, Governor Arnold Schwarzenegger, and labor, business, health care and consumer groups in the state.

Under the proposal, all 800,000 uninsured children in the state would be covered, said Assembly Speaker Fabian Nu?ez (D-Los Angeles).

The legislation would rely on a system of shared responsibility between employers, health care providers, consumers and government agencies. It would mandate that most Californians carry health care insurance but would subsidize the insurance for families earning up to 4 times the federal poverty line.

The bill also includes cost-containment provisions, including a requirement that insurance companies spend no more than 15 cents of every $1 of premiums on administrative costs.

Those with preexisting conditions would be guaranteed coverage under the plan.

It would be paid for through a combination of fees and taxes to be approved by the voters in a November 2008 ballot proposal that would include a tobacco tax, employer fee assessed along a sliding scale based on annual payroll, a hospital fee and a county share of cost.

The bill now will be considered by the California State Senate.