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New Exchange Legislation in Print!

Update! The California legislature has just posted newly amended versions of the two bills that will create the California Health Benefits Exchange. The full texts of SB 900 (Steingberg & Alquist) and AB 1602 (Perez) are available now.

The previous versions of the two bills were quite similar. Not anymore. With these amendments, the tasks necessary to create the exchange are divided between the two bills. The governance and structure is set forth in SB 900. Requirements on plans that participate in the exchange and other insurance market regulatory changes are in AB 1602. Also, each bill is contingent on the other passing, so both have to pass for the design to take affect. (Also, they both remain majority-vote bills).

We will be doing a full summary and analysis soon, but in the meantime, here is a quick-and-dirty run down of the newly amended legislation:

SB 900

o The exchange will be an independent agency, financed almost entirely from fees imposed on participating health plans, and free from the requirement of an annual budget appropriation;

o The 5-member board of directors will be comprised of the Director of HHS (or his/her designee), 2 gubernatorial appointees, 1 Senate appointee, and 1 Assembly appointee;

o Members of the board will not be paid for their service, and exactly who can be a member is subject to strict conflict-of-interest disqualifications; and

o The exchange will be headed by an executive director and run by staff who will not be subject to civil service requirements. The ED will serve at the pleasure of the board.

AB 1602

o The exchange will be an active purchaser and selective carrier;

o Plans in the exchange will be required to offer at least one product at each level of 5 tiers of coverage, and the board can force them to offer additional products;

o Plans that sell within the exchange have to offer all of the products from outside of the exchange inside of it as well.

From Here?

Well, both bills are quite far along in the process. They have passed out of their respective houses of origin and are currently one step away from being heard on the floor of the other house. If/when they pass that floor vote, it’s on to the Governor for his signature (or veto).

Deadline approaching… according to the official Legislative Calendar, the last day for any bill to be passed is Aug 31… a very short 11 days away!

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