Schwarzenegger Signs Key Bills to Move Health Care Reform to Next Level

Schwarzenegger Signs Key Bills to Move Health Care Reform to Next Level

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Gov. Arnold Schwarznegger’s seal of approval on two bills has made California the first state in the nation to create a marketplace from which individuals and small businesses can buy affordable health coverage.

“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,” said Schwarzenegger as he signed the bills put forward by Sen. Elaine Alquist (D-Santa Clara) and Assembly Speaker John Pérez (D-Los Angeles). “Choice and competition have the power to improve health care quality and reduce health care costs for California consumers.”

“This is going to dramatically improve coverage,” asserted Daniel Zingale, a senior vice president at The California Endowment (TCE), at a media teleconference Friday.

The online exchange, a vital component of the new health care reform act enacted by Congress earlier this year, will allow consumers to compare and buy plans from five categories, from a so-called “Cadillac” plan to a more modest one.

The exchange is expected to help many of California’s 6.7 million uninsured individuals and 3.7 million small businesses to obtain coverage. They can compare plans and buy health insurance in the private market using federal tax subsidies to make coverage more affordable.

In recent years, small business owners in California have been struggling to continue to offer coverage to their employees as providers have imposed double-digit increases in premiums, said Scott Hauge, president of Small Business California. The bills signed by Scwarzenegger will help small businesses “come together and drive down prices,” he said.

Under the Patient Protection and Affordable Care Act, small businesses—defined as those with 50 or fewer employees earning below $50,000 per year—can get a tax credit of up to 35 percent of what the employer contributes towards the employee’s premium for the 2010-2013 tax years. The tax credit increases to 50 percent in the 2014-2016 tax years.

Although consumers won’t be able to buy coverage through the exchange until 2014, the state can now begin putting together a board that will oversee the exchange and ensure that participating insurers comply with federal guidelines.
The five-member Health Care Exchange Board, appointed by the governor and the legislature, will develop procedures and criteria to enroll Californians in the exchange and select qualified health plans to participate. Once in, “the board will be watching the store,” said Kelly Hardy of Children Now.
“Successful implementation [of health care reform] is in everybody’s interests,” said Marley Klaus, communications and media director at TCE.
TCE has poured several million dollars into educating state residents about the new health care law, which was signed by President Obama this past March.