(Bloomberg) -- President Barack Obama says he’s giving Americans who’ve received cancellation notices from their insurers a one-year reprieve before they have to get new policies under his health-care law.
“I completely get how upsetting this can be for a lot of Americans, particularly after they heard assurances from me,” Obama said of the policy cancellations in remarks at the White House. “Today I’m offering idea that will help do it.”
The administration will send a letter today instructing state insurance commissioners to notify insurers that they can continue the sale of canceled policies for an additional year, according to White House officials. The extension will be available only to those already enrolled in the policies that were canceled because they didn’t meet coverage standards under the health care law.
The change, aimed at defusing a political crisis caused by cancellation letters that hundreds of thousands of Americans have received from their insurers, will be effective for one year, until the end of 2014.
Obama is seeking quell a potential revolt by Democrats facing re-election next year who have been urging the president to come up with a plan before the House votes on a Republican proposal that may come as early as tomorrow.
The Republican legislation would let insurers continue selling for a year current policies that don’t meet the Affordable Care Act’s requirements to new customers, which White House officials said would undermine a central principle of the health law.
“Nobody is as unhappy as I am” about the rollout of of the law, House Democratic leader Nancy Pelosi said before Obama spoke. Democrats in the House are in agreement that “we must have a fix.”
House Speaker John Boehner, an Ohio Republican, said before the president’s remarks that he is “highly skeptical” that the system can be modified through administrative measures.
Under Obama’s plan, insurance companies that extend their policies must notify consumers that alternatives exist under the health-care law, including options that may include tax credits, and are required to describe the ways that their plans don’t meet the consumer protections required under the law.
The extension affects only a small slice of Americans, who typically use these plans for less than a year as a stopgap policy between jobs, and is aimed at smoothing the transition into the new insurance system established by the law, according to White House officials, who asked for anonymity to describe the policy before the president’s remarks.
The debut of the insurance marketplace at the core of the law, Obama’s signature achievement, has been marred by flaws in the federal online exchange and by the insurance cancellation letters. In the debate over the law, Obama had repeatedly promised that Americans who liked their existing insurance plans would be able to keep them.
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