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Calif. first to create health care exchange

October 1, 2010 12:00:00 AM PDT
With the stroke of his pen, Gov. Arnold Schwarzenegger signed California's health care reform bills into law Friday.The legislation is three years in the making.

"It is a health crisis when you see emergency rooms all over the state of California closing down because of tens of millions of dollars of unpaid bills," Schwarzenegger said. "It is a moral crisis when the greatest state in the greatest country in the world has 8 million people uninsured."

The law creates the California health benefit exchange, the first in the country under federal health care reform.

Starting in 2014, small businesses with less than 100 workers and Californians who make between $29,000 and $88,000 for a family of four can buy competitive insurance. They'll have the same purchasing advantages as those who work for large firms.

That's good news for many, including Los Angeles resident Rhoda Avery, who is uninsured and trying to pay down a $22,000 hospital bill.

"I'll probably be 100 when I pay it off," she said. "Hopefully I don't have to go back to the hospital and have surgery before I get some good insurance."

The federal government will give California $1 million to develop the exchange, then after 2014 it will be self supportive and won't rely on the state's general fund.

One of the state's largest insurers, Blue Shield of California, says the exchange is long overdue and critical to fixing a broken insurance system.

"It also creates healthy competition in my industry," said Bruce Bodaken, Blue Shield's CEO. "It creates a leveled playing field to compete not on the basis of health status, but on quality and service."

Taking part in the exchange will be voluntary and it won't alter Medi-Cal and the Healthy Families Program.

A five-member board will govern the exchange when it's up and running in 2014.

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