Quote:

---

The Obama administration Thursday night significantly relaxed the rules of the health-care law for millions of consumers whose individual insurance policies have been canceled, saying they could buy bare-bones health plans or entirely avoid the requirement that most Americans have health insurance.

The surprise announcement, four days before the Dec. 23 deadline for people to choose coverage that begins on Jan. 1, triggered an immediate backlash from the health insurance industry and raised new fairness questions about a law intended to promote affordable and comprehensive coverage.

“This type of last-minute change will cause tremendous instability in the marketplace and lead to further confusion and disruption for consumers,” said Robert Zirkelbach, spokeman for American’s Health Insurance Plans, the industry’s main trade group.

Federal health officials said that the new rules will allow any consumer whose current, substandard insurance plan is being canceled to claim a “hardship exemption,” if they believe that the health plans sold through the new federal and state marketplaces are more expensive.

“This is a common sense clarification of the law,” said Joanne Peters, a spokeswoman for the Department of Health and Human Services. “For the limited number of consumers whose plans have been canceled and are seeking coverage, this is one more option.”

The rule change is the second major response by the Obama administration to a public and political furor that erupted this fall when people who buy health coverage on their own began to receive notices that their policies were being canceled because they fell short of new benefit standards that go into effect on Jan. 1. The cancellations prompted a wave of complaints that President Obama had reneged on an oft-repeated promise that, under the Affordable Care Act, people could keep their insurance plans if they wanted.

The shift goes significantly beyond an accommodation to those people, numbering in the millions across the country, that the president announced at an apologetic news conference in mid-November, at which he said that insurance companies could continue for another year to offer health plans sold to individuals and small businesses that do not meet the benefits that requirements under the new law.

In allowing people with canceled policies to claim hardship exemptions, the Obama administration is freeing them from one of the central features of the law: a requirement that most Americans must have health insurance or risk a fine. The exemption also frees them to buy “catastrophic,” or skimpy coverage. Until now, the law allowed only people under 30 the possibility of buying catastrophic coverage if they couldn’t afford a better health plan — in an effort to attract young adults who have been particularly prone to avoid coverage.

An Obama administration official, speaking on condition of anonymity, predicted that relatively few people would take advantage of the opportunity to avoid the law’s insurance requirement, reasoning that they have had insurance in the past so would want it in the future.

The administration’s move responds to prompting by about a dozen Democratic senators, all facing tough reelection campaigns next year or in states that Obama lost in last year’s election, who contended that the steps the president already took did not go far enough to help people whose insurance has been canceled.

A half-dozen of those senators sent a letter on Wednesday to Health and Human Services Secretary Kathleen Sebelius, asking for her to allow people who’s plans have been cancelled to claim hardship exceptions and buy bare-bones, catastrophic coverage. “We have heard from many of our constituents who are upset by the cancellation of the health plans,” said the letter, whose six Democratic signers include both of Virginia’s senators, Sens. Mark Warner and Tim Kaine.

---