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CA Gov: Sign bill for “Health Benefits Exchange”

September 2, 2010
Governor Arnold Schwarzenegger
State Capitol Building
Sacramento, CA 95814
Re: SB 900 (Alquist) and AB 1602 (Perez) – Signature requested
Dear Governor Schwarzenegger:
Consumers Union, nonprofit publisher of Consumer Reports, writes in strong support of SB 900 and AB 1602, two bills that together will establish the comprehensive framework for a Health Benefit Exchange (“Exchange”) in California. Health Benefit Exchanges are a cornerstone of the federal healthcare reform law.
Finding, comparing, and affording individual health insurance policies in California are impossibly difficult tasks in today’s healthcare marketplace. The Exchange required under federal law is meant to remedy that situation. The Exchange will create a consumer-friendly system for consumers, and eventually small businesses, to find affordable, standardized policies from certified health plans whose benefits and full costs the purchaser can truly understand.
Under these two bills, the Exchange also will ensure consumers get to the right and most affordable choice by performing screening and enrollment functions for Medi-Cal and Healthy Families; determine eligibility for tax credits and subsidies for individuals and small employers, including an appeal system therefore; and promote competition amongst insurers based not just on cost, but also on quality. This can be accomplished through use of the Exchange’s buying power—with potentially 8.4 million enrollees in California eligible to participate, according to UC Berkeley estimates, the Exchange should have substantial leverage on both cost and quality improvements.
A headline story in Modern Healthcare this week touts California as “ahead of other states on implementation” of federal healthcare reforms—in fact the “First to Act”. Given the size and complexity of our state, and with estimates of two to more than 8 million potential enrollees in the Exchange, it behooves California to start now and allow sufficient time to create a thoughtful model of the Health Benefit Exchange required of all states. These bills will support the state’s application to the federal government for planning implementation of the Exchange.
For those reasons, and in support of your longstanding and steadfast efforts for comprehensive health reform in California, Consumers Union urges you to sign SB 900 and its companion, contingent bill AB 1602 into law.
Respectfully submitted,
Elizabeth M. Imholz
Special Projects Director