Schwarzenegger signed two bills that create the framework for the California health benefit exchange. It's an online system that promises affordable, quality healthcare for all.
"This exchange will allow consumers and small business to research, compare and purchase health insurance products that best suit their needs," he said.
California now becomes the first state in the nation to implement health care reform required under federal law.
One of the provisions under the legislation allows young adults to stay on the parent's health care plans until they turn 26.
Young people are among the estimated 7 million uninsured Californians. Katherine Luttrell says being able to stay on her parents. plan is a huge relief.
"Who knows what the economy will be like once we get out, if we get jobs or if they'll cover us, so it's a great stress relief, definitely," she said.
Health insurers and other critics warn there could be unintended consequences of the new reform policies, but a passionate majority won a hard fought debate.
"This legislation is the culmination of decades of work to finally create a more rational, cost effective and fair health care system," Assm. Speaker John Perez, D-Los Angeles, said.
Kathy Haren hopes the promises hold true. She owns a store called Domus in the Willow Glen District of San Jose and says finding affordable, quality health insurance for her employees is next to impossible.
"Small independent stores just can't afford decent coverage. We can't compete with the big guys," she said.
The reform may be historic, but it's not immediate. Consumers like Kathy won't be able to buy coverage from the exchange until 2014.
