California is first to form health insurance exchange

Amid appeals from the White House and consumer health care advocates, Gov. Arnold Schwarzenegger signed two key health bills Thursday that make California the first state to begin establishing its own health insurance exchange, which could widen medical coverage for small businesses and the millions of uninsured.

Facing a deadline of midnight Thursday to act on bills, Schwarzenegger signed scores of new laws, ranging from requiring schools to provide fresh drinking water to extending foster-care benefits to young adults and rolling back the date by which kindergartners must turn 5 in order to start school.

The health benefits exchange is a key component of federal health care overhaul legislation signed into law in the spring by President Barack Obama.

In a Wednesday phone call with Schwarzenegger, the president urged the governor to sign the two-bill legislative package that establishes the new insurance marketplace in time for a January 2014 opening, the federal deadline.

To help California develop the exchange, the federal government announced Thursday that it would give the state $1 million, with possibly more funding to come.

"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 legislation signed by the governor Thursday — Senate Bill 900 and Assembly Bill 1602 — will establish the California Health Benefit Exchange and an independent, five-member oversight board appointed by the governor and the Legislature that will be tasked with defining how the exchange will operate.

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