Word from the Obama administration that Americans who recently had their health insurance canceled will be allowed to buy “catastrophic policies” mostly intended for young adults has upset the insurance industry, NPR’s Julie Rovner tells our Newscast desk.
The Washington Post goes a bit further, saying that the administration’s decision to once again relax some of the rules of the new federal health care law sparked “an immediate backlash from the health insurance industry and raised fairness questions about a law intended to promote affordable and comprehensive coverage on a widespread basis.”
Here’s how Julie describes what’s happening:
“Six U.S. senators — five Democrats and one independent — asked the Department of Health and Human Services to allow people whose policies were cancelled and were facing higher premiums to be allowed to purchase the less expensive, but also less generous catastrophic plans.
“Those plans had been limited to those under age 30 and those who could prove financial hardship.
“HHS Secretary Kathleen Sebelius confirmed in a letter to the senators that those whose plans have been cancelled and who have been unable to find affordable replacement coverage will be considered as part of that hardship group.
“The insurance industry, however, says potentially allowing many more people to buy stripped down policies could destabilize an already fragile market.”
“The Oct. 1 launch of the HealthCare.gov website became an embarrassment for the administration after problems with the online gateway to coverage froze out millions of potential customers. But the biggest political damage to the president has come from cancellations issued to at least 4 million people who had individual plans they purchased themselves. Those plans did not pass muster under the health care law, which generally requires more robust benefits.”
But the changes announced Thursday, “could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” Robert Zirkelbach, a spokesman for the insurance industry’s trade group, America’s Health Insurance Plans, said.
Bloomberg News adds that “the change, which administration officials said will affect fewer than 500,000 people, comes days before a Dec. 23 deadline for people to buy new coverage effective Jan. 1.” Bloomberg also rounds up the administration’s recent responses to the difficult roll out of its program:
“Obama has responded with a flurry of last-minute policy changes to give people more time to sign up for insurance and blunt the effect of cancellations.
“He announced Nov. 14 that states could allow plans to extend current policies for a year. … A week later, he pushed back the deadline to sign up for coverage effective Jan. 1 by eight days, to Dec. 23.
“On Dec. 13, the administration urged insurers to provide more leniency to people shopping for new coverage by allowing them to pay for plans later in January and sign up retroactively for coverage beginning Jan. 1. The government also asked insurers to cover care from any doctor or hospital in January and to cover refills of prescriptions during the month regardless of any network restrictions.”