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 In a release of new guidelines to insurers and employers for 2015,
the administration said it would now allow renewal of noncompliant
health plans that begin as late as October 1, 2016. Officials said
they believe the change would affect 500,000 to 1.5 million people
who hold "transitional policies" that lack consumer protections
enshrined in the law known as Obamacare.
The policy stems from a wave of insurance plan cancellations
last year that sparked a public outcry against President Barack
Obama and Democrats, forcing the administration to abruptly allow
people to renew noncompliant policies in states where regulators
allowed the change. At least 23 states have accepted renewals.
Administration officials said the two-year extension was intended to
give consumers added time to consider switching to
Obamacare-compliant plans and predicted the number of future
renewals would shrink rapidly from a limited pool of policyholders.
But Republicans, who have accused Obama of misleading the public
about being able to keep their plans, said the change was intended
to help Democrats in this year's November congressional midterm
elections by eliminating the likelihood of more cancellations in the
weeks ahead of the poll.
"This reeks of politics," said Brendan Buck, spokesman for House
Speaker John Boehner. "Instead of working with Congress to prevent
Americans from losing the plans they like and can afford, the
president is unilaterally rewriting laws around the election
calendar."
Administration officials denied political motivation, saying Obama
directed his administration to provide certainty for consumers,
businesses, insurers and states by getting directives for 2015 out
early.
"We're doing this in the right way, for the right reasons," one
official said.
Another set of guidelines laid out how the administration will
mitigate risk in new private insurance markets established by
Obamacare including changes intended to stabilize premium levels by
compensating insurers for potential losses from the renewal
extensions.
Republicans have warned that renewals could lead to a taxpayer
bailout of insurers by encouraging young healthy policyholders to
remain independent and leaving the marketplaces with old or sick
policyholders who would be costly to insure.
But officials said they expect to make risk adjustments that would
be budget neutral under Obamacare, known formally as the Patient
Protection and Affordable Care Act (ACA).
"There is broad agreement that if more young and healthy individuals
choose not to participate in the new marketplaces, it could lead to
higher premiums for those consumers that remain in the exchanges,"
said Karen Ignagni, president and chief executive officer of
America's Health Insurance Plans, a industry lobby and trade group.
"We are currently reviewing the new changes to the premium
stabilization programs to assess their impact on affordability for
consumers," she said in a statement.
More than 4 million people have enrolled in health insurance through
the marketplaces since the law's botched rollout last October, which
has kept enrollment numbers below initial projections. The 2014
enrollment period ends on March 31, and the administration has
acknowledged that the final tally could be between 5 million and 6
million enrollees, short of the 7 million initially forecast.
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Officials indicated that they could relax a consumer-protection rule
that currently prohibits insurers from spending more than 20 percent
of plan revenues on administrative costs, including marketing, in
response to risk-related issues.
The administration also issued new rules and guidelines including an
extra month for consumers to sign up for 2015 coverage, an early
indication of insurance costs and extra time for states that now
have federal marketplaces to decide to run their own exchanges.
Consumers will now have a three-month open enrollment period,
running from November 15, 2014, to February 15, 2015.
But some can expect plans with higher out-of-pocket costs. Maximum
levels on out-of-pocket expenses, designed to protect consumers from
extraordinarily high costs, will rise to $6,600 for individuals and
$13,200 for families, the administration said. Expenses are
currently capped at $6,350 for an individual and $12,700 for a
family.
The administration also issued regulations laying out the procedures
that insurers and employers need to follow to report on the
insurance status of workers and customers. Officials said the rules
streamline the process that employers will have to follow as the
law's employer mandate is phased in over the next two years.
But some employer groups found little to cheer about. "Complying
with the ACA reporting requirements will be an extremely daunting
task for retailers. The administrative complexities of collecting
and reporting this data ... is mind-boggling," the Retail Industry
Leaders Association said in a statement.
Under the changes, state governments that currently have federal
partnership marketplaces will have until the end of June to file
blueprints to run their own marketplaces beginning January 1.
Previously, the applications were due in January.
In separate development, the investigative arm of Congress said it
would look into the operation of marketplaces run by individual
states including Oregon's troubled program.
The announcement by the Government Accountability Office followed
requests by a number of lawmakers, Republicans and Democrats, for an
investigation into the Cover Oregon health insurance exchange and
the $304 million in federal money it has received. Due to technical
glitches, Oregon's exchange still does not permit members of the
public to self-enroll for health insurance.
(Additional reporting by Will Dunham in Washington and Caroline
Humer in New York; editing by Peter Cooney and Cynthia Osterman)
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