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Life Health > Health Insurance > Health Insurance

PPACA: Exchange Bills Head to Schwarzenegger

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The California Senate and California Assembly have approved A.B. 1602 and S. 900, bills that could govern the creation of a state health insurance exchange program.

If implemented as written, the bills would create a California Health Benefit Exchange.

A.B. 1602, introduced by Assembly Speaker John Perez, D-Los Angeles, would create the structure for the exchange. The Assembly voted 51-27 Wednesday to approve the bill, and the Senate approved it Tuesday by a 21-13 vote.

S. 900, introduced by Sen. Elaine Alquist, D-Santa Clara, Calif., would set the exchange.

Members of the Assembly voted 49-25 to approve that bill last week, and members of the Senate voted 22-13 to approve the bill Tuesday.

Gov. Arnold Schwarzenegger, R, has not publicly stated whether he will sign the bills.

Schwarzenegger signed a state health system change bill into law in 2003, but opponents succeeded in blocking implementation of that law.

The federal Affordable Care Act, the package that includes the Patient Protection and Affordable Care Act, requires states to set up health insurance exchange coverage distribution systems for individuals and small employers by 2014. The federal law would require carriers participating in the exchange to sell at least 4 different types of coverage.

After 2017, states can

let employers with more than 100 employees participate in their exchange systems, according to California legislative analysts.

States can offer several regional exchanges, and they also can join with other states to form multi-state exchanges.

The California exchange package would require carriers participating in the exchange to offer at least 5 levels of coverage.

The package also would authorize the California Health Facilities Financing Authority to provide a working capital loan of up to $5 million to assist in the establishment and operation of the exchange, but the package makes it clear that the authority would not have to lend anything to the exchange, and that the exchange organizers would have to repay any loan by June 30, 2016.

The package had the support of a number of consumer groups and unions.

WellPoint Inc., Indianapolis (NYSE:WLP), and the Association of California Life & Health Insurance Companies, Sacramento, Calif., opposed the bills.

Local Health Plans of California, Sacramento, a group that runs nonprofit health plans for government agencies, supported the bills.


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