WASHINGTON — The Obama
administration, struggling with continued political fallout over its troubled
health care law, said Wednesday that it would allow consumers to renew health
insurance policies that do not comply with the law for two more years.
The action is a reflection of the
difficulties the president has faced as he tries to build support for the
Affordable Care Act, and the backlash over his promise — which he later
acknowledged was overstated -- that individuals who liked their insurance plans
could keep them, no matter what.
Under pressure from Democratic
candidates, who are struggling to defend the president’s signature domestic
policy, Mr. Obama announced in November a one-year reprieve on the cancellation
of the noncompliant policies.
But today’s action goes much
further, essentially stalling for two more years one of the central tenets of
the much-debated law: that health insurance plans had to meet a basic minimum
standard for care. The administration’s decision appears to buttress Republican
criticism that the law was not ready for implementation last year.
The action also helps Democrats in
tight midterm election races because it avoids the cancellation of insurance
policies that would otherwise have occurred at the height of the political
campaign season this fall.
Administration officials said that
people would be able to renew noncompliant policies through October 2016 if
state officials agreed.
White House officials said
President Obama was trying to smooth the transition to a new health insurance
system.
“This approach incorporates the
flexibility that exists under the law,” said a senior administration
official.
Republicans said they were not
surprised by the president’s latest move. Indeed, they said it confirmed their
contention that parts of the health care law were unpopular and unworkable.
The reprieve for noncompliant
policies was the latest in a series of waivers, deadline extensions, delays and
dispensations announced by the administration. Lawyers said that Mr. Obama was
testing the limits of his powers.
“I support national health care,
but what the president is doing is effectively amending or negating the federal
law to fit his preferred approach,” said Jonathan Turley, a law professor at
George Washington University. “Democrats will rue the day if they remain silent
in the face of this shift of power to the executive branch.”
Mr. Turley said that Mr. Obama was
setting precedents that could be used by future presidents to delay other parts
of the health care law -- or to suspend laws dealing with taxes, civil rights or
protection of the environment.
The new health care law, adopted
in 2010, sets dozens of federal standards for health insurance, requiring
coverage of services in 10 specific areas and providing many consumer
protections not found in older insurance policies. Starting last fall insurers
canceled and terminated many insurance policies for individuals and small
businesses because they did not meet the law’s minimum coverage
requirements.
The cancellation notices, sent to
several million people, touched off a political furor that threatened the
electoral prospects of Democratic candidates, including many who had voted for
the Affordable Care Act. One of the vulnerable Democrats, Senator Mary L.
Landrieu of Louisiana, has offered legislation that would allow people to keep
their current insurance plans indefinitely if they continue paying
premiums.
Under the transition policy
announced by Mr. Obama in November, insurers “may choose to continue coverage
that would otherwise be terminated or canceled.” Insurers were allowed to renew
existing policies even if they did not provide the “essential health benefits”
prescribed by law. In addition, the administration said, insurers could continue
charging women more than men and could set higher premiums based on a person’s
health status, in violation of the new law.
The White House said Wednesday
that it was extending the transition policy so that consumers could renew 2013
health plans for two additional years.
“This gives individuals and small
businesses the choice of staying in their plan or joining a new marketplace
plan,” the administration said
Republicans cried foul.
“Clearly, the president admits
that Obamacare has failed by trying to hide its full effects from voters until
he is safely out of office,” said Rory Cooper, a spokesman for Representative
Eric Cantor of Virginia, the House majority leader. “They won’t be fooled.”
In response to Mr. Obama’s request
in November, at least 27 states have allowed renewals of polices that do not
comply with the new law, according to the National Association of Insurance
Commissioners.
Robert Laszewski, a consultant who
works closely with insurers, said the reprieve for noncompliant policies “tends
to undermine the sustainability of Obamacare” by reducing the number of people
who will buy insurance through the exchanges.
With enrollment lagging behind
goals and projections, Mr. Laszewski said, “the insurance industry is desperate
to get healthy people into the exchanges.”
Republican members of Congress say
they have received letters from thousands of constituents complaining about the
cancellation of insurance they liked.
Mr. Obama and many Democrats in
Congress say consumers should not be alarmed by cancellation notices because, in
many cases, they can get better coverage at a lower price on an insurance
exchange, especially if they qualify for subsidies.
But consumers say they have found
that many of the new policies have high deductibles and limit their choice of
doctors and hospitals.
The troubled rollout of the health
care law has prompted the White House to revise many deadlines and
requirements.
Federal officials said last month
that medium-size employers would not have to offer insurance to full-time
employees until 2016, two years after the deadline set in the health care
law.
Last week the administration
announced that it would allow some people to obtain federal subsidies for health
insurance purchased in the private market outside of health insurance exchanges
-- even though officials had repeatedly said that subsidies were available only
for coverage purchased through an exchange.