Policy cancellations: Obama will allow old plans
By JULIE PACE
and DAVID ESPO
The Associated Press | November 15,2013
President Barack Obama speaks about his signature health care law, Thursday. Bowing to pressure, President Barack Obama intends to permit continued sale of individual insurance plans that have been canceled because they failed to meet coverage standards under the health care law, officials said Thursday.
WASHINGTON — Bowing to pressure, President Barack Obama on Thursday announced changes to his health care law to give insurance companies the option to keep offering consumers plans that would otherwise be canceled.
The administrative changes are good for just one year, though senior administration officials said they could be extended if problems with the law persist. Obama announced the changes at the White House.
“This fix won’t solve every problem for every person, but it’s going to help a lot of people,” the president said.
He acknowledged that “we fumbled the rollout of this health care law” and pledged to “just keep on chipping away at this until the job is done.”
He also promised to work to regain the trust of the American people.
“I think it’s legitimate for them to expect me to have to win back some credibility on this health care law in particular and on a whole range of these issues in general,” he said.
Obama has been under enormous pressure from congressional Democrats to give ground on the cancellation issue under the health care overhaul, a program likely to be at the center of next year’s midterm elections for control of the House and Senate.
It’s unclear what the impact of Thursday’s changes will be for the millions of people who have already had their plans canceled. While officials said insurance companies will now be able to offer those people the option to renew their old plans, companies are not required to take that step.
The main industry trade group, America’s Health Insurance Plans, said Obama’s offer comes too late and could lead to higher premiums, since companies already have set 2014 rates based on the assumption that many people with individual coverage will shift over to the new markets created under Obama’s law.
Karen Ignagni, president of the industry group, didn’t speculate on whether companies would extend coverage for those threatened with cancellation, but warned in a statement that “changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers.”
Insurance companies will be required to inform consumers who want to keep canceled plans about the protections that are not included under those plans. Customers will also be notified that new options are available offering more coverage and in some cases, tax credits to cover higher premiums.
Under Obama’s plan, insurance companies would not be allowed to sell coverage deemed subpar under the law to new customers, marking a difference with legislation that House Republicans intend to put to a vote on Friday.
Only last week, Health and Human Services Secretary Kathleen Sebelius told a Senate panel she doubted that retroactively permitting insurers to sell canceled policies “can work very well since companies are now in the market with an array of new plans. Many have actually added consumer protections in the last three-and-a-half years.”
Republicans were unimpressed with the changes.
House Speaker John Boehner, speaking in advance of the president’s announcement, insisted it was time to “scrap this law once and for all.”
While the White House deals with the cancellation issue, the administration is also promising improvements in a federal website so balky that enrollments totaled fewer than 27,000 in October in 36 states combined. The administration had said in advance the enrollment numbers would fall far short of initial expectations. After weeks of highly publicized technical woes, they did.
Adding in enrollment of more than 79,000 in the 14 states with their own websites, the nationwide number of 106,000 October sign-ups was barely one-fifth of what officials had projected — and a small fraction of the millions who have received private coverage cancellations as a result of the federal law.