Obama Offers Obamacare Break to People With Canceled Insurance Plans

Obama offers Obamacare tweak in light of bipartisan political pressure.

President Barack Obama speaks about his signature health care law, Thursday, Nov. 14, 2013, in the Brady Press Briefing Room of the White House in Washington.

President Barack Obama announced on Thursday, Nov. 14, that those who had their health insurance plans canceled due to Obamacare can keep them through 2014.

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Caving to mounting political pressure, President Barack Obama announced Thursday people who have had their health insurance plans canceled because they didn't comply with the minimum standards required by the Affordable Care Act can keep them through 2014.

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Obama, who repeatedly promised people that if they liked their health insurance they could keep it, took heat after millions received notices canceling their coverage. Democratic lawmakers wary of re-election in 2014 also began joining Republicans in criticizing the situation, forcing the president's hand. Even former President Bill Clinton weighed in, saying people should be allowed to keep their old insurance.

"I completely get how upsetting this could be for a lot of Americans, particularly after assurances they heard from me," Obama said. "To those Americans, I hear you loud and clear. I said that I would do everything I can to fix this problem and today I am offering an idea that will help do it."

 

Senior White House officials, speaking on background in a conference call with reporters prior to the president's announcement, said Obama ordered his staff to find a solution to the problem last week.

"Insurers can offer customers the option to renew their 2013 health plans in 2014 without change, allowing these individuals to keep their plans," said one official. "Essentially this is an extension of the grandfathering principle, both to peoples' plans have changed since the law took effect and to people who purchased the individual plans since the law took effect."

The change still leaves the decision up to private insurers on whether or not they want to throw the car into reverse and take back the cancellation notices already sent out.

The White House also made it clear the concession would be an administrative, rather than legislative, fix, to eliminate the potential for further policy tweaks by lawmakers. It also will not allow insurers to offer the catastrophic coverage plans – the majority of which are being canceled – to new consumers, just those who had them in 2013.

House Republicans had been pushing their own fix, legislation that would have delayed implementing Obamacare's minimum standards and allowed insurers to continue selling the low cost, low coverage plans to the entire market. House Speaker John Boehner said the proposal was a "targeted strike" aimed at undermining the whole law.

[MORE: Healthcare.gov Concerns Lost Amid Partisan Sniping]

"The contrast is clear; we are willing to work with anyone who is interested in making sure that the Affordable Care Act works for Americans throughout the country," the senior White House official said, pointing out that the aim of the Republican proposals was not to improve the existing legislation. "

The announcement is a cosmetic fix that does little to undermine the foundation of Obamacare, though, unlike some proposals put forward by both Democrats and Republicans. Ultimately the law will still reform the insurance market to include a certain minimum level of care – such as a ban on lifetime or annual spending caps, forcing insurers to offer coverage to people with pre-existing conditions and other consumer-friendly provisions. It also does not take away one of the most controversial parts of the law, which is the requirement all Americans must have some form of health insurance or pay a penalty by the end of March.

The president's signature domestic policy, passed in 2010 solely with Democratic votes, has endured a raft of bad news in recent weeks.

When the website constructed to be an online, user-friendly marketplace was rolled out Oct. 1, it was plagued with bugs and overwhelmed by volume, making it nearly impossible to navigate let alone sign people up for coverage. Just Wednesday, the administration revealed that while the website experience was improving, sign-ups for health insurance were a fraction of their expectations. Just 27,000 people had successfully signed up for insurance through the federal site, compared with an additional 79,000 who had done so through state-run sites. While 106,000 people have successfully signed up, the administration had projected that number would have totaled 500,000 at this stage.