Obama to allow canceled insurance to be sold another year

Written By Lynn Sweet Posted: 12/02/2013, 05:48pm

WASHINGTON — Many people whose health insurance was canceled as a result of the new Obamacare law will be able to keep their plan for another year, President Barack Obama announced on Thursday, in the wake of a consumer uproar and a Democratic revolt.

Obama, during a press conference where he discussed his fix, acknowledged that he “fumbled” the Oct. 1 launch of his signature law, underestimated the complexity of selling insurance and as a result lost credibility he will have to earn back.

Obama is directing the Department of Health and Human Services to use its discretionary powers to allow insurers to offer current individual policyholders the option of a one-year renewal, an administration official said. Under the Obama fix, insurance companies will not be compelled to re-offer the plans, the official said. Obama ordered the fix following a massive backlash — including from Democrats — over his broken, often repeated now-discredited promise “if you like your insurance plan, you will keep it.”

The waves of cancellations were creating enormous political problems for Democratic lawmakers up in 2014 — and giving ammunition to Republicans who have been trying to gut the Affordable Care Act for years. The White House move means pressure will mount on insurance companies to reoffer policies that have already been cancelled. According to an administration official briefing reporters on Thursday before Obama’s comments, the insurance companies deciding to sell the one-year renewals to existing customers will not be required to offer the upgraded coverage that is mandated in the Affordable Care Act.

However, new customers will not be allowed to buy these plans, considered substandard under the Obamacare health care law. It is not clear yet if the companies will have the option of raising rates for the renewed policies. Health insurance companies deciding to offer the renewals will have to offer an unusual dose of transparency and information. The companies will have to inform their current customers before they renew their current plans that they will have new and potentially better options available on the new Obamacare health insurance marketplace and will have to spell out what coverage the renewed plans will not include compared to the upgraded Obamacare policies.

Also, people will have to be told financial assistance may be available to some people if they buy a policy from a private insurer in an Obamacare marketplace. The Obama fix will not allow insurance companies to sell the old plans to new customers in 2014. That would “undermine the Affordable Care Act,” the administration official said.

House Speaker John Boehner R-Ohio said in a statement after Obama’s remarks, “After finally acknowledging he repeatedly misled the American people to sell his health care law, the president is asking Americans to trust him again. The President has absolutely no credibility on his promise. True to form, it appears this is little more than a political response designed to shift blame rather than solve the problem.

“This problem cannot be papered over by another ream of Washington regulations. Americans losing their coverage because of the president’s health care law need clear, unambiguous legislation that guarantees the plan they have and like will still be allowed. That’s why the House will be voting on the Keep Your Health Plan Act tomorrow, and the president should support it.”

Earlier on Thursday, Boehner said he was “highly skeptical” the fix can be made with an administrative order and the House will go ahead with a Friday vote on a bill by Rep. Fred Upton R-Mich. to allow insurance companies to continue offering the plans withdrawn as a byproduct of the Obamacare law.

The Upton plan would allow the old plans to be sold to old and new customers. House Minority Leader Nancy Pelosi D-Calif. said Thursday the Upton plan would “unravel the fabric” of the Obamacare plan while the Democrats in Congress and the Obama White House are looking for a fix that would “thread the needle.”

Congressional Democrats — in particular those with big 2014 contests — are angry at the Obama White House, with cancellations of health insurance policies far more a political threat than the botched Obamacare website, Healthcare.gov and the resulting initial low enrollments. Senate Majority Leader Harry Reid D-Nv. was pressuring the White House to come up with a plan before a meeting today between White House officials and the Senate Democrats.

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