Bill hopes to create new health insurance scheme for low-income Californians

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José Martinez/OnCentral

Sacramento lawmakers will get their first crack Thursday at a bill that would create a new health insurance program for low income Californians.

Sacramento lawmakers will get their first crack Thursday at a bill that would create a new health insurance program for low income Californians.

Under the federal health care law, states have the option of creating what it calls a "basic health plan."

The government-funded program would contract with other health plans to provide care. Experts say it would be more affordable than coverage residents would get through the Health Benefit Exchange, the state’s online marketplace where people can buy insurance. Democratic State Senator Ed Hernandez authored the bill.

“The ultimate goal of the Affordable Care Act, and the ultimate goal of policy makers, is to make sure that more people have access to health care," says Democratic State Senator Ed Hernandez, author of the bill. "And to me, this is still the best way by providing lower out of pocket expense for them.”

Ken Jacobs of the UC Berkeley Labor Center says creating a basic health plan could result in more Californians being covered overall, but warns the program could remove nearly a million people from the exchange. Such a massive removal could hinder its ability to control premium costs over time.

"The trade-off here is getting lower cost plans for lower income residents on the one hand," he says. "Where on the other hand, you’ve got a smaller exchange with less negotiating power, less leverage and less ability to drive some of those system reforms."

Jacobs helped analyze the impact of the program for the California Health Benefit Exchange, which opposed the bill last year.

Hernandez says the exchange would still have significant buying power, even without those who may defect to the new plan. He also says the program would be almost entirely federally funded.

An Assembly committee will look at the cost this Thursday.

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