By Elise Viebeck - 12/20/13 06:43 AM EST
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.
"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 WarnerLiberal group: Kaine could be 'disastrous' VP pick Buzz grows that Tim Kaine will be Clinton's VP pick GOP platform attempts middle ground on encryption debate MORE (D-Va.), Jeanne Shaheen Jeanne ShaheenDemocrats ‘freaked out’ about polls in meeting with Clinton GMO labeling bill advances in the Senate over Dem objections Overnight Defense: US blames ISIS for Turkey attack | Afghan visas in spending bill | Army rolls up its sleeves MORE (D-N.H.), Mary LandrieuMary Landrieu oil is changing the world and Washington Ex-Sen. Kay Hagan joins lobby firm Republican announces bid for Vitter’s seat MORE (D-La.), Heidi HeitkampHeidi HeitkampFeds weigh minimum train crew sizes Senate Dems push Obama for more Iran transparency Emerging technology-based consensus may help clear the air MORE (D-N.D.), Angus KingAngus KingClinton VP pick could face liberal ire Independent Sen. Angus King endorses Clinton McCain: Inaction on encryption 'furthering the cause of child pornographers' MORE (I-Maine) and Tim KaineTim KaineProgressive group praises Clinton VP for opposing TPP Clinton looks to expand electoral map Kaine wields Spanish skills in Miami VP appearance 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.