This week, the California legislature passed two bills to set up a health-insurance marketplace. This move comes after the health care reform bill, which was passed in March, directed states to set up their own health care exchanges, or else their residents will receive access to a federal exchange. Governor Schwarzenegger is expected to sign the bills.



California is the first state to begin implementation of a health-care exchange. Massachusetts and Utah already had exchanges in place when the bill was passed. California’s exchange will most likely be the largest one established by one state. As many as 8.3 million individuals may be eligible to purchase insurance plans through the exchange. Under federal law, businesses with up to 100 employees can buy coverage through the exchange. The limit may be raised by states in 2017.



The exchange will most likely offer insurance through a website that will provide detailed information about plans. The plans will be standardized. Live helpers will be available to explain the plans to consumers. The plans aren’t required to be operating until January 2014. Under the plan, California will sell insurance in five categories, which will vary widely in coverage and price.



This legislation comes on the heels of an announcement by California’s Department of Insurance that it will allow premium increases by Anthem Blue Cross (14% increase) and Blue Shield of California (9% increase).