Consumers allowed to keep substandard health plans into 2017

President Obama talks with Boston Mayor Martin Walsh, left, and Massachusetts Gov. Deval Patrick, both Democrats. Obama's latest change to the Affordable Care Act was requested by Democrats facing tough reelection campaigns this year.
(Saul Loeb / AFP-Getty Images)

WASHINGTON — The Obama administration announced Wednesday that some Americans with health insurance policies that don’t meet consumer standards set by the president’s new healthcare law would be allowed to keep their plans into 2017, three years later than originally envisioned.

The delay, which could put off the final cancellation of some health plans until after President Obama leaves office, may have limited practical impact.

Senior administration officials, briefing reporters on condition of anonymity, said they believed that only about 1.5 million consumers nationwide currently were covered under such plans, about 500,000 of which were purchased by individuals and the rest by small businesses. That number probably will dwindle over the next couple of years because of the usual churn in the individual insurance market.

“The expectation is that this will be a very small number of people,” one of the senior officials said.

The political effect could be larger. The move marks the latest effort by the administration to contain one of the most damaging controversies shadowing the launch of the Affordable Care Act.


“The goal is to implement the Affordable Care Act in a common-sense way,” a senior administration official said, adding that officials believe the delay would be the last significant change the administration will make to the law’s deadlines and requirements.

Officials also announced Wednesday that the open enrollment period for health coverage next year would begin on Nov. 15 — notably after the fall’s midterm election — and would extend through February 2015.

The new deadline for canceling health plans comes after an uproar last fall when many Americans who had bought coverage on their own were stunned to learn insurers were canceling their policies because they did not include required benefits or meet other standards set by the law.

In selling the healthcare law, Obama had promised that people who liked their existing plans would be able to keep them.

White House officials repeatedly have said that the vast majority of people who got cancellation notices were able to replace their old policies with new ones, in some cases at lower cost.

But those arguments have not quelled the political controversy. Conservative and Republican groups already have run millions of dollars of advertising against Democratic candidates highlighting the cancellations, accusing Democrats of participating in the “lie of the year.”

The healthcare law was designed to phase out health insurance plans in 2014 if they did not include a basic set of benefits and limits on how much consumers can be required to pay out of pocket for their medical care.

After the controversy broke, the administration announced in November that state regulators could allow insurers to renew old policies in 2014.

Only about half the states have agreed to the extensions. Some, particularly those with liberal, Democratic insurance regulators, have balked at allowing what they consider substandard plans to remain on the market.

The new guidance would allow these plans to be renewed again as late as Oct. 1, 2016, meaning that some consumers could hold onto health plans into 2017.

That extension may defuse a political time bomb that the Obama administration would have faced this year if some consumers had once again received notices canceling their insurance plans just ahead of the November election.

The move appeared calculated to particularly help Democratic lawmakers facing tough reelection battles. The administration announced that the delay had been developed in consultation with several of these lawmakers, including senators from Virginia, Louisiana, New Hampshire and Colorado.

But Republicans kept up their attacks on the law and the president’s repeated moves to unilaterally adjust deadlines and other requirements in the legislation.

“The latest delay underscores the president’s misguided fixation on political gains over the disastrous impact Obamacare is having on Americans,” House Oversight and Government Reform Committee Chairman Darrell Issa (R-Vista) said Wednesday.

Also Wednesday, the GOP-controlled House passed a bill to delay until 2016 the requirement that Americans have health coverage. Twenty-seven Democrats voted with the majority. The legislation has virtually no chance of advancing in the Democratic-controlled Senate.