Obama Announces Noncompliant Health Plans Allowed One More Year

By Mary Silver, Epoch Times
November 15, 2013 Updated: November 15, 2013

In a belated attempt to keep a 2010 promise, President Barack Obama said on Thursday that insurers could keep selling old plans. 

Millions of people have received notices that their health plans don’t meet the standards of the Affordable Care Act and will be discontinued. After today’s announcement, they may be able to hang on to their plans a bit longer.

The reprieve lasts one year.

“This fix won’t solve every problem for every person, but it’s going to help a lot of people,” the president said at the White House. 

“We fumbled the rollout of this health care law,” said Obama. He pledged to “just keep on chipping away at this until the job is done.”

Companies will not be forced to reissue canceled policies, but it may make financial sense for the companies to do so.

Rep. George Miller (D-Calif.) has proposed legislation to mandate that insurance companies reissue canceled health insurance policies until the open enrollment period ends March 31, according to CQ Roll Call. House Minority Leader Nancy Pelosi supports that idea, but it may not pass in the Republican-controlled House.

Forced to Advertise Others Plans

Insurers will be forced to clearly disclose the limits of their existing plans, and describe other options, including comparing the costs and benefits with other companies’ plans. As with many aspects of the ACA, the devil is in the details. 

Insurers had sent notices that did not spell out customers’ rights and options, potentially convincing them to lock in an unnecessarily expensive plan before open enrollment ends.

Insurers Must Move Customers

According to a consumer alert from the state of Washington, if a person receives a cancellation notice from his insurance and takes no action, the insurer is required to automatically move him into a plan that is closest to the existing plan. It may cost more, but other options on state exchanges may cover more and cost less. 

Until Obama’s announcement Thursday, starting Jan. 1, all health plans would be required to cover at least 60 percent of medical costs, fully pay for preventive screenings, and cover prescription drugs, maternity, and other benefits. That requirement is now delayed a year, which could depress enrollments and increase premiums.

The devil is also in the politics. Opponents were quick to condemn the new rule.

Republican National Committee (RNC) Chairman Reince Priebus did not pull his punches. He issued a statement, which said, “The president seems to believe that he can rewrite the law whenever it’s politically expedient, but our Constitution says otherwise. I’d encourage the president to listen to frustrated Americans who are telling him that ‘ObamaCare’ needs to be repealed and replaced with conservative solutions that will actually lower costs and fix the mess he has created.”

House Speaker John Boehner, speaking in advance of the president’s announcement, insisted it was time to “scrap this law once and for all.”

“You can’t fix this government-run health care plan called ‘Obamacare,’” he said. “It’s just not fixable.”

The Associated Press contributed to this report.