Under the federal health care law, states have the option of creating a basic health plan.
The government funded program would contract with health plans to provide care.
Experts say it would be more affordable than coverage they would get through the health benefit exchange. That's the state's online marketplace where people will be able to buy insurance.
Democratic State Senator Ed Hernandez authored the bill.
HERNANDEZ: "The ultimate goal of the affordable care act, and the ultimate goal of we as policy makers is to make sure that more people have access to health care. 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 he says the program could remove nearly a million people from the exchange.
That could hinder its ability to control premium costs over time.
JACOBS: "The trade-off here is getting lower
cost plans for lower income residents on the one hand, 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
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 without those in the plan.
He also says the program would be almost entirely federally funded. An Assembly committee will make its assessment about the cost this Thursday.