The Obama administration announced an exemption to the Affordable Care Acts individual mandate to buy health insurance starting in 2014.
The mandate will not apply in 2014 to people whose individual insurance policies were canceled because the policies did not meet standards set forth in the ACA, the Department of Health and Human Services announced Dec. 19.
In addition, those people will be eligible to purchase catastrophic policies that previously were available only to people younger than 30, according to ACA regulations. These policies have significantly less expansive coverage and higher deductibles, but also premiums that are about 20% cheaper than the lowest premiums in the new health insurance exchanges.
President Obama previously announced that people whose policies were canceled because of the ACA coverage standards should be able to renew their policies. However, ultimate discretion was left up to state insurance commissioners, and some have declined to allow insurers to continue to offer policies that were deemed substandard or not comprehensive enough under terms of the ACA.
Some individual policies do not provide the array of free preventive services the ACA requires, for example, or do not meet requirements regarding the removal of caps on lifetime and annual benefits.
Obama has been dealing with the political fallout from charges that he broke his word by stating multiple times that those who wanted to keep their current health insurance could do so after full implementation of the ACA.
The latest move to address the problem was not met with enthusiasm by insurers, who will lose potential enrollees if those who previously had individual policies are given an exemption from the mandate and choose not to buy insurance in the exchanges. Likewise, insurers did not expect people older than 30 to be eligible for catastrophic plans.
The latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers, Karen Ignagni, president of the trade association Americans Health Insurance Plans, said, according to Politico.
Consumer letter regarding the exemption: www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/cancellation-consumer-options-12-19-2013.pdf