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Stack of newspapers displays a health care article - 
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STEVE CHIOTAKIS: The state of California passed
legislation to set up a new market for health insurance. This online exchange could be a model for other states as they implement the federal health care overhaul passed earlier this year. Marketplace's Amy Scott is with us live and has the latest for us. Good morning, Amy.

AMY SCOTT: Good morning, Steve.

CHIOTAKIS: So how is this exchange going to work?

SCOTT: Well California will set up a website, where consumers can compare different health insurance plans. They'll be connected with subsidies if they're eligible and there will be five categories of insurance that people can buy -- ranging from high-end plans that cover lots of stuff to more basic, catastrophic insurance for young people.

CHIOTAKIS: So Amy, is this going to be a model for other states?

SCOTT: It's likely to be. Under the health care overhaul, states either have to set up one of these exchanges or people can use a federal version. I spoke this morning with Timothy Jost at Washington and Lee University. He says these don't have to be up and running for another 3 years or so, but California wanted to get a jump on it.

TIMOTHY JOST: Setting up an exchange is going to be a very difficult process because it basically means restructuring the way in which we purchase health insurance in the United States. In most states, they will probably adopt legislation next year.

And Jost says these exchanges should make insurance more affordable by making the market for insurance competitive.

CHIOTAKIS: All right, Marketplace's Amy Scott reporting live for us. Amy, thanks.

SCOTT: You're welcome.

Follow Amy Scott at @amyreports