Panel Approves Bill To Establish Health Insurance Exchanges
On Tuesday, the Assembly Health Committee approved a bill (AB 1602) by Assembly Speaker John PÃ©rez (D-Los Angeles) that would create the California Health Benefit Exchange to allow individuals and small businesses to purchase private health insurance coverage, the San Francisco Chronicle reports (Colliver/Lagos, San Francisco Chronicle, 4/21).
The new national health reform law requires requires such exchanges to be established by Jan. 1, 2014. The law also aims to facilitate participation in the exchanges by providing tax credits to small businesses and federal subsidies to individuals without employer-sponsored coverage (Ferriss, Sacramento Bee, 4/21).
PÃ©rez said state lawmakers will need to pass AB 1602 this year for it to take effect by the deadline. He added that swift passage of the legislation will provide California officials with sufficient time to set up the exchange (San Francisco Chronicle, 4/21).
PÃ©rez's bill would direct the Legislature and the governor to appoint an executive board for the exchange (Sacramento Bee, 4/21). The board would administer federal planning money and oversee California's efforts to establish the health plan marketplace.
In addition, the measure would charge California's exchange with identifying individuals who qualify for public health insurance and enrolling them in Medi-Cal, Healthy Families or other services. Medi-Cal is California's Medicaid program and Healthy Families is the state's Children's Health Insurance Program.
The exchange also would need to enforce the federal health insurance mandate. State officials would send reports to the U.S. Department of Treasury listing residents who could be exempt from the mandate because of a lack of affordable health care options.
Changes to State Law
In addition to establishing the exchange, PÃ©rez's bill would modify state law to conform to provisions in the national health reform law that will take effect by the end of 2010, such as:
- Extending coverage for dependents until age 26;
- Eliminating lifetime limits on policy benefits; and
- Prohibiting insurers from denying coverage to children because of pre-existing conditions.
Bill on High-Risk Pools
In related news, the Assembly Health Committee has approved a bill (AB 1887) by Assembly member Mike Villines (R-Clovis) that would establish a high-risk insurance pool for individuals who are unable to obtain private coverage because of a pre-existing condition.
California already has a high-risk insurance pool that covers about 7,000 residents, but it does not meet requirements to qualify for federal subsidies under the new health reform law.
The high-risk pool proposed under AB 1887 would operate along with the state's current pool until 2014, when insurance companies will be prohibited from denying coverage based on pre-existing conditions (Herdt, Ventura County Star, 4/20).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.