HHS changes rules on O-care mandate

The Obama administration announced Thursday it would broaden exemptions from ObamaCare's requirement that people have insurance.

It said it would allow individuals whose health insurance was canceled under ObamaCare to buy catastrophic plans once intended mainly for young people. 

The significant change comes just before a deadline people faced for choosing plans to ensure they had coverage on Jan. 1. 

While the administration touted the move as a "common sense clarification," the insurance industry expressed outrage and some opponents of the law slammed the White House. 

"The latest rule chance could cause significant instability in the marketplace," Karen Ignagni, president of America's Health Insurance Plans, an industry group, said in a statement. She warned the move would lead to further confusion and disruption for consumers.

Under the plan, individuals who saw their old plans canceled will be able to purchase bare-bones coverage, according to a source connected with the health industry.

Current rules say that to qualify for a catastrophic plan, individuals must be either under 30 or qualify for a "hardship" exemption. 

"This is a common-sense clarification of the law. For the limited number of consumers whose plans have been cancelled and are seeking coverage, this is one more option," said Department of Health and Human Services spokeswoman Joanne Peters. 

The move is a response to a group of Democratic senators who had sought a change, and can be seen as part of a series of efforts the administration has made to respond to Democrats worried about how troubles with the law could play in next year's midterms.

The guidance was laid out in a letter to Sens. Mark WarnerMark Robert WarnerOvernight Cybersecurity: Senate Intel releases election security findings | Facebook to meet with officials on Capitol Hill amid Cambridge Analytica fallout | Orbitz admits possible breach Facebook to meet with officials on Capitol Hill amidst Cambridge Analytica fallout Senate Intel releases summary of election security report MORE (D-Va.), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenSenate sides with Trump on providing Saudi military support Companies fretting over ‘foreign agents’ label Senators demand cyber deterrence strategy from Trump MORE (D-N.H.), Mary LandrieuMary Loretta LandrieuSenate GOP rejects Trump’s call to go big on gun legislation Project Veritas at risk of losing fundraising license in New York, AG warns You want to recall John McCain? Good luck, it will be impossible MORE (D-La.), Heidi HeitkampMary (Heidi) Kathryn HeitkampKoch-backed group launches six-figure ad buy against Heitkamp Overnight Defense: Senate sides with Trump on military role in Yemen | Dem vets push for new war authorization on Iraq anniversary | General says time isn't 'right' for space corps Senate sides with Trump on providing Saudi military support MORE (D-N.D.), Angus KingAngus Stanley KingLindsey Graham: Trump firing Mueller would 'probably' be impeachable offense Angus King: McCabe firing seemed 'mean-spirited' With bills on the table, Congress must heed the call to fix our national parks MORE (I-Maine) and Tim KaineTimothy (Tim) Michael KaineBill to bolster gun background checks gains enough support to break filibuster Senators demand cyber deterrence strategy from Trump Two-year defense spending smooths the way to a ready military MORE (D-Va.), who asked the administration on Wednesday to clarify whether those who had their plans canceled could qualify for the exemption. 

Landrieu is considered one of the most vulnerable Democratic senators up for reelection next year, and Shaheen could also face a competitive race.

The White House appeared to preemptively downplay the decision in a briefing with some reporters on Thursday.

According to CNBC, White House officials said that fewer than half a million individuals have received insurance cancellation letters but have not yet signed up for new plans. The administration downplayed estimates that as many as 15 million people would be affected, saying many policies were either grandfathered or automatically renewed by insurers.

Under the original ObamaCare rules, those who bought insurance after the bill was signed into law, changed plans during that period or saw insurance companies significantly alter their plans were not eligible to keep their coverage.

Some insurance companies also said they would not continue to offer certain existing plans, saying that it is too administratively burdensome to manage policies that do not satisfy basic coverage requirements mandated by ObamaCare. Instead, insurers offered consumers more expensive coverage options that include increased benefits.

The Obama administration announced in response to the uproar that health insurers could offer existing plans to existing customers — even if they did not satisfy minimum requirements for plans required by ObamaCare — for one year.

President Obama also apologized for his misstatements, saying his administration had "fumbled the rollout" of the law.

"My working assumption was that the majority of those folks would find better policies at lower costs or the same costs in the marketplaces, and that the universe of folks who potentially would not find a better deal in the marketplaces, the grandfather clause would work sufficiently for them. And it didn’t. And again, that’s on us. ... And that’s why I’m trying to fix it," Obama said.

—This story was posted at 8:24 p.m. Dec. 19 and was updated at 6:43 a.m. on Dec. 20.