The stakes are high for Californians when it comes to the health care overhaul, mainly because the coverage problems in this vast state are so large.

With a new UCLA study estimating that more than 8 million Californians, or nearly 25 percent of the population, lack health coverage, many health experts say California will be impacted more than other states by the reform legislation.

"When this is fully implemented in 2014 or beyond, we will see some two-thirds or more (of the uninsured) getting coverage and, with that, better access to care and more affordable coverage," said Marian Mulkey, senior program officer for the California HealthCare Foundation, an independent philanthropy group based in Oakland.

But not everyone will benefit. Medicare beneficiaries who have certain types of policies may experience disruptions and high-income earners will pay more in taxes. And California will still be left with a large number of uninsured, including illegal immigrants, who either don't qualify for the reforms or are exempted from them.

A last-minute change proposed in the health care bill would benefit Kaiser Permanente, based in Oakland, which covers more than 6 million Californians, and other large nonprofit health insurers. Under the change, tax-exempt insurers would have to pay a new fee levied on insurers, but on only half of their premiums.

With key congressional leaders supporting the plan, California played an important role in moving it forward. The state also helped reignite the stalled debate over the legislation after many of Anthem Blue Cross' 800,000 California policyholders were hit with premium increases of as high as 39 percent.

Rate, cap rules

President Obama seized on the rate increases - which affected individual policyholders who buy coverage on their own rather than receiving it through an employer - in a bid to highlight the less savory practices of the health insurance industry.

The final package does not include the president's proposal to provide federal oversight for unreasonable rate increases. But it does contain a number of changes that will affect a state like California, where the market for individual health insurance operates largely unfettered by rules.

The legislation immediately forbids insurers from placing lifetime caps on how much they will spend on their members, and it prohibits insurers from unfairly canceling coverage. In 2014, when the mandate for Americans to have insurance goes into effect, insurers will be prohibited from denying coverage to people with pre-existing medical conditions.

For Medicare beneficiaries in California, the biggest changes will likely affect those in Medicare Advantage policies. People with Medicare Advantage plans receive medical and other health benefits through private insurance, typically in the form of a managed care plan.

The health legislation is designed to reduce federal payments to Medicare Advantage plans, which the government has been overpaying by about 14 percent compared to traditional Medicare in an effort to steer more beneficiaries into private insurance.

Medicare Advantage cuts

A proposal accompanying a package of legislative fixes taken up by the House on Sunday would deepen planned cuts to Medicare Advantage - from $118 billion to $132 billion over 10 years.

With the reduction in payments, many health experts say insurers will probably increase premiums, reduce benefits or possibly drop out of the Medicare Advantage program.

"You're just going to throw seniors out of Medicare Advantage and throw them onto traditional Medicare," said John Graham, director of health care studies for the Pacific Research Institute, a free-market think tank based in San Francisco.

This will affect California more relative to other states because a greater percentage of Medicare recipients here - 34 percent compared to the national average of 22 percent, according to the Kaiser Family Foundation - have opted for Medicare Advantage policies. That's because of state residents' long history and familiarity with health maintenance organizations, or HMOs, and other types of managed care.

A significant portion of California's uninsured population will remain uncovered after the law goes into effect.

"We have a higher share of immigrants among the uninsured, and immigrants are not going be helped by this bill, particularly the undocumented who are not going to be allowed to buy into the purchasing pool," said William Dow, associate professor of health economics at UC Berkeley.

He was referring to insurance marketplaces, called exchanges, that the law creates for people to buy health coverage - giving them potential economy-of-scale benefits.

The legislation prevents illegal immigrants from receiving federal subsidies to buy coverage, and goes a step further by prohibiting them from using their own money to purchase a policy from the exchange.

Benefits for Medi-Cal

Supporters of the overhaul said the state has a lot to be pleased about. The legislation, for example, increases Medi-Cal payments for doctors and pays almost all of the costs for newly eligible Medi-Cal recipients through 2016.

"California has traditionally gotten less of our fair share of federal funds," said Anthony Wright, executive director of California Health Access. "It's not everything the state of California wanted, but it is an improvement. At the end of the day, this is a bargain not a burden for the state of California."