Gov't offers a stopgap health insurance option

Published on NewsOK Modified: December 19, 2013 at 11:28 pm •  Published: December 19, 2013

WASHINGTON (AP) — Trying to head off more bad news over the chaotic rollout of President Barack Obama's health care law, the administration Thursday offered stopgap options so people whose existing plans got canceled are not penalized.

Health and Human Services Secretary Kathleen Sebelius said in a letter to a group of senators that she will use authorities in the law to issue a "hardship exemption" from tax penalties to those who received cancellations and were not able to line up new coverage.

The administration is also opening up a special coverage plan created under the law for young adults. Regardless of their age, Sebelius said people whose plans were canceled will be able to buy a bare bones catastrophic plan intended for those under 30.

Additionally, the department is setting up a dedicated hotline for those who got cancellations, at 1-866-837-0677.

The insurance industry immediately criticized the moves.

"This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers," said Robert Zirkelbach, spokesman for America's Health Insurance Plans. Only Wednesday, the industry had announced its own accommodation — giving consumers an extra 10 days to pay January's premiums.

The Oct. 1 launch of the 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.

Obama was roundly criticized for reneging on a longstanding promise that if you liked your plan, you would be able to keep it under his health care law. The president apologized, and then said insurers could extend those plans for one more year. Most state regulators followed Obama's lead and gave insurance companies the additional latitude, but it's unclear whether the problem has been fully resolved.

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