California's lower house has passed the first phase of a plan to extend medical insurance to almost all residents, it was reported on Tuesday.

Under the plan, 14.4 billion dollars will be extended to nearly all residents for medical insurance, the Los Angeles Times said.

The move late Monday gave Governor Arnold Schwarzenegger and his Democratic allies their first victory in a risky yearlong campaign to overhaul California's healthcare system, the paper said.

The measure, negotiated by Schwarzenegger and Assembly Speaker Fabian Nuez, would require almost everyone in California to have insurance starting in 2010, according to the paper. It would provide subsidies and tax credits for those who would have trouble paying their share of the premiums.

The plan would bring medical coverage to 3.6 million Californians, including 800,000 children, who currently do not have it. But the plan cannot go into effect unless it passes the state Senate and voters approve a companion initiative that Schwarzenegger and Nuez are planning to place on the November ballot to finance it.

The measure, which passed the Assembly on a party-line 45-31 vote, was heralded as an important step not only for California but for a national Democratic effort to enact a similar plan for the entire country.

"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 vote . . . we are closer than ever to fixing our broken healthcare system."

But the measure faces a more skeptical reception in the Senate, where Democratic leaders are asking whether it makes sense to adopt such a giant change at a time when California has a projected 14 billion-dollar budget gap.

(Xinhua News Agency December 19, 2007)