Nov. 14—President Barack Obama announced Thursday plans to temporarily lift requirements of his 2010 healthcare overall that required cancellation of millions of individual insurance plans by the end of 2013. However, it was unclear if insurers and state regulators would—or could—undertake those extensions.
The administration issued letters to insurance regulators lifting the Affordable Care Act’s (ACA’s) requirements on individual and small group market plans for policy years that start Jan. 1, 2014, to Oct. 1, 2014. And the administration left open the possibility for further “transition periods” if problems with the law persist.
“This fix won’t solve every problem for every person, but it’s going to help a lot of people,” Obama said in a Thursday press conference.
President Faces Bipartisan Criticism
Obama’s actions followed bipartisan rancor over a large and growing number of individual plans that were cancelled in recent weeks because they did not comply with ACA requirements that start Jan. 1, 2014. It was unknown how many of the 14 million people in the individual market have received cancellations, but a Nov. 13 count by Bank of America Merrill Lynch found 3.78 million cancellations in 22 states.
Obama also appeared to come out against a Republican bill that the House of Representatives is scheduled to vote on Friday that would lift the ACA provisions for a year and allow more such policies to be issued.
The president has drawn bipartisan criticism amid the loss of coverage because of his repeated promise during the fight to enact the law and his recent reelection campaign, “If you like your plan, you can keep it. Period.” Obama said the promise stemmed from his administration wrongly projecting that cancelled policy holders would either be able to receive better, cheaper ACA marketplace coverage or that the ACA’s grandfather provisions would keep their policies from being cancelled.
“That proved not to be the case, and that’s on me,” he said.
The ACA’s federal and some of its state enrollment websites have been crippled by technological failures since the Oct. 1 launch of enrollment, which kept most policyholders with cancelled plans from enrolling in marketplace coverage.
Fewer than 27,000 people have signed up for private coverage in the federal marketplace, and more than 79,000 have done so in the 14 state marketplaces, according to data the administration released Nov. 13. The 106,000 October sign-ups were barely one-fifth of what the administration had projected.
Insurers Express Concerns Over Possible Extensions
A central question about the new option was whether state regulators would allow the policy extensions and whether insurers would voluntarily pursue them. Obama said he expected at least some state regulators to allow the extensions.
The insurance industry has repeatedly said in recent weeks that such an extension would carry heavy costs for them for a variety of reasons, including the logistical challenges of restarting plans their IT systems were programmed to phase out. Insurers also have worried that continuing plans in the private market could dilute the insurance pool for their plans offered on the ACA’s public marketplaces and damage their solvency.
“Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace,” Karen Ignagni, president and CEO of America’s Health Insurance Plan, said in a written statement on the insurance changes. “If, due to these changes, fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers. Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.”
Obama said additional steps to address the cancelations could include legislation, but he did not specify what changes those would entail.
Publication Date: Thursday, November 14, 2013