The bill will cover 3.6 million Californians, including 800,000 children whose parents cannot afford a health insurance policy.
But the legislative victory is just the first phase. The bill has to get the state Senate and voters' approval. The state assembly voted 45 to 31 in favor of the bill. The bill is seen as paving the way for a similar move in other American states.
"California has taken a giant step forward today on something that many people thought could not be done," Schwarzenegger said. "With the Assembly's courageous voter... we are closer than ever to fixing our broken healthcare system."
The measure, however, may face rougher waters in the state Senate since California has a projected $14-billion budget deficit. To fund the ambitious healthcare program, California voters will be asked to approve three new tax measures.
These are a $2.6 billion tax on employers that does not provide healthcare, a $1.5 billion levy on smokers and a $2.3 billion tax on hospitals.
State Senate President Pro Tempore Don Perata said, "I'm very concerned about the projected $14 billion budget deficit, its impact on existing state health programs and how this relates to our efforts to improve healthcare coverage for Californians."
If the bill is approved by the state Senate, California will be the fourth state to have passed legislation expanding coverage to uninsured residents. The first three are Massachusetts, Maine and Vermont.
