Obamacare Weakens Insurance Mandate Again

White House gives new 'temporary hardship exemption.'

Health and Human Services Secretary Kathleen Sebelius testifies on Capitol Hill in Washington, Wednesday, Dec. 11, 2013, before the House Energy and Commerce Committee hearing on the implementation failures of the Affordable Care Act.
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The Obama administration has bent the Affordable Care Act rules once again, this time allowing those whose health insurance plans were canceled to avoid tax penalties, according to The Associated Press. Health and Human Services Secretary Kathleen Sebelius also announced that people of any age whose plans were canceled will be able to buy catastrophic health insurance. Originally, these skimpier plans were only available to consumers under age 30, who, as a group, are perceived as healthier.

HHS has developed a special hotline for people whose plans were canceled and a pre-recorded message tells callers there's a "special hardship exemption" which might be available. Callers are warned the plans only offer three primary care visits per year before a deductible is met and have higher out-of-pocket deductibles. To sign up for the new catastrophic health insurance, consumers must find a health insurance company offering one and send them the cancellation letter from their old provider and a completed exemption form from HHS. As of Friday morning, live operators are also available to give instructions. A form on healthcare.gov explains how to qualify for an exemption from the fine for not having insurance.

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The way the Affordable Care Act was originally laid out, the individual mandate required anyone who was uninsured and eligible under the law to enroll in a health care plan or pay a fine. There were also exceptions to the mandate for people who were too poor to afford it (the premium cost was more than 8 percent of their household income), for people who would have been eligible for Medicaid if their states had agreed to expand it, certain religious groups, prisoners and Native American tribes, according to Kaiser Health News.

This new shift in policy gives another large swathe of the population the option of opting out of insurance without a fine. Approximately 500,000 people whose plans were canceled have not yet enrolled in new plans, according to The AP. Other estimates, mainly from Republican critics, suggest the exemptions will affect closer to five million people, according to The Washington Post.

Republicans, who have uniformly opposed President Barack Obama's signature domestic policy, were quick to critique the new change.

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"Holding a fire sale of cheap insurance is not a responsible fix for a broken program," said Sen. Marco Rubio, R-Fla., on Thursday evening according to Politico. "This is a slap in the face to the thousands of Americans who have already purchased expensive insurance through the Obamacare exchanges."

The announcement could have serious consequences for health insurance providers. America's Health Insurance Plan (AHIP), the largest health industry trade group in the country, which agreed to accept late payments for premiums earlier this week, voiced its disappointment on Twitter: "Latest rule change could cause significant instability in marketplace & lead to further confusion & disruption for consumers."

 

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