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All Eyes on California After Governor Signs Nation's First State Health Insurance Exchange

Last week, California became the first state to bring its state health exchange into law. Known as the California Health Benefit Exchange, the exchange is expected to be operational by 2014 and cover at least 3 million uninsured Californians.  Success of the program depends upon the appointment of a powerful five-member health care oversight board. Board members are politically appointed, serve four-year terms, and are responsible for crafting implementation of the exchanges.  

The crucial health care board appointments are made by the Governor (two seats), the Assembly Speaker (one seat) and the Senate President Pro Tem (one seat); the final member will be the incoming governor's Secretary of Health.  It remains to be seen whether these appointments are determined by political connections.

Kathleen Stoll, director of health policy for Families USA, a health advocacy group based in Washington, D.C., responded: "What California is doing really sets some standards that could be useful to other states as they plan their own exchanges."  "I think there is a lot of debate right now on how independent to make their boards," she continued. "California now provides a starting point, if not a model for other states."  Part of the legislation's accountability provision comes in the form of a ban on insurance industry representatives, health care providers and others with a conflict of interest serving on the oversight board. 

While signing the bills to create the exchange, Gov. Schwarzenegger stressed the critical role states play to implement the national health care law, noting that "for national reform to succeed, it will be up to the states to make it work."