By David Espo and Julie Pace
Bowing to pressure, President Barack Obama on Thursday announced changes under his health care law to give insurance companies the option to keep offering consumers plans that would otherwise be canceled.
The administrative changes are good for just one year, though senior administration officials said they could be extended if problems with the law persist. Obama announced the changes at the White House.
“This fix won’t solve every problem for every person, but it’s going to help a lot of people,” the president said.
But it was unclear if state officials, who would have to implement the changes, would go along. Insurers also had concerns.
The National Association of Insurance Commissioners said the president’s proposal could undermine the new health insurance markets his law seeks to create.
Obama’s proposal “may lead to higher premiums and market disruptions in 2014 and beyond,” said Louisiana Insurance Commissioner Jim Donelon, speaking for the organization.
At the White House, Obama acknowledged that “we fumbled the rollout of this health care law” and pledged to “just keep on chipping away at this until the job is done.”
He also promised to work to regain the trust of the American people.
“I think it’s legitimate for them to expect me to have to win back some credibility on this health care law in particular and on a whole range of these issues in general,” he said.
Obama has been under enormous pressure from congressional Democrats to give ground on the cancellation issue under the health care overhaul, a program likely to be at the center of next year’s midterm elections for control of the House and Senate.
It’s unclear what the impact of Thursday’s changes will be for the millions of people who have already had their plans canceled. While officials said insurance companies will now be able to offer those people the option to renew their old plans, companies are not required to take that step.
The main industry trade group, America’s Health Insurance Plans, said Obama’s offer comes too late and could lead to higher premiums, since companies already have set 2014 rates based on the assumption that many people with individual coverage will shift over to the new markets created under Obama’s law.
Karen Ignagni, president of the industry group, didn’t speculate on whether companies would extend coverage for those threatened with cancellation, but warned in a statement that “changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers.”
Insurance companies will be required to inform consumers who want to keep canceled plans about the protections that are not included under those plans. Customers will also be notified that new options are available offering more coverage and in some cases, tax credits to cover higher premiums.
Under Obama’s plan, insurance companies would not be allowed to sell coverage deemed subpar under the law to new customers, marking a difference with legislation that House Republicans intend to put to a vote on Friday.