California's new state marketplace for health insurance announced Friday that it has received a $39 million federal grant to launch major operations over the next year.
The California Health Benefit Exchange is part of the federal health care overhaul approved last year. Starting in 2014, the exchange is expected to provide new health insurance options to individuals and small businesses after negotiating rates with health plans.
Such rates are supposed to be more affordable for employers and individuals because the state would leverage its negotiating power for more than 1.5 million enrollees, while the federal government would provide subsidies and tax credits. But the five-member exchange board still has to sort out many questions, such as whether to focus more on price or quality of care, as well as how best to enroll individuals across a wide range of income levels.
The health exchange intends to use the grant toward its three-year business plan, as well as to hire a contractor to build its information technology platform.
California was the first state last year to establish a state health exchange. As part of a deal struck with the Legislature, former Gov. Arnold Schwarzenegger received two four-year appointments to the board not subject to legislative approval. He appointed Susan Kennedy, his chief of staff, and Kimberly BelshÃ©, his Cabinet secretary for health and human services, in the final days of his tenure.
Other appointees include: Robert K. Ross, president and CEO of The California Endowment (appointed by Senate President Pro Tem Darrell Steinberg); Paul Fearer, a Union Bank executive and board chairman of the Pacific Business Group on Health (appointed by Speaker John A. PÃ©rez); and Health and Human Services Secretary Diana Dooley, who serves as board chairperson.