Why States Should Reject the California Model of a Health Insurance Exchange
Robert Moffit /
State officials around the country are getting a lesson from the California legislature in how not to respond to Obamacare.
While the new federally supervised, state-based health insurance exchanges are to be up and running by January 1, 2014, the California legislature is poised to create the California Health Benefit Exchange through enactment of two bills (AB 1602 and SB 900). If Governor Arnold Schwarzenegger—who ran for office as a champion of conservative economic policy—signs these bills, California would be the first state to enact an ideologically compliant set of controls on the California health insurance market, effective January 1, 2011.
The California legislation would create the exchange as an independent government entity run by a politically appointed board with representatives of the governor, the Speaker of the California Assembly, and the Senate Rules Committee. From all appearances, this is the version of a health insurance exchange favored by the left, meaning that its main function would be to regulate insurance options, control benefits, enroll individuals in Medi-Cal (the California version of the Medicaid program) and administer government subsidies for public health. With the California board, its administrative costs would be borne by assessments on the persons getting coverage through the exchange; it would also benefit from appropriations outside of the California budget process. (more…)