WASHINGTON -- The Obama administration announced Wednesday that some Americans with health insurance policies that don’t meet consumer standards set by the Affordable Care Act will be allowed to keep their plans into 2017, three years later than originally envisioned.
Allowing some consumers to keep old insurance plans past the end of the President Obama’s term in office marks the latest effort by the administration to get out from under one of the most damaging controversies shadowing the launch of the healthcare law.
Senior administration officials, briefing reporters on condition of anonymity, said they believe that about 1.5 million consumers nationwide currently are covered under such plans, about 500,000 of which were purchased by individuals and the rest by small businesses.
“The goal is to implement the Affordable Care Act in a common-sense way,” a senior administration official said, adding that officials believe that this latest announcement will be the last significant change the administration will make in the law’s deadlines and requirements.
Officials also announced that the open enrollment period for healthcare coverage next year would begin on Nov. 15 -- notably after the fall’s midterm elections -- and extend through February 2015.
Many Americans who had bought healthcare plans on their own were stunned last fall when insurance companies announced that their policies would be canceled because they did not include required benefits or meet other standards set by the law.
Because Obama had promised that people who liked their existing plans would be able to keep them, the cancellation letters quickly became a major political issue.
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. However, those arguments have not quelled the political uproar. Conservative and Republican groups already have run millions of dollars' worth of advertising against Democratic candidates on the issue, accusing them 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 or include limits on how much consumers can be required to pay out of pocket for their medical care.
After the controversy broke, the administration announced that state regulators could allow insurers to renew old policies in 2014. Not all states have gone along with that plan. Some, particularly those with liberal, Democratic insurance regulators, have balked at allowing what they consider sub-standard plans to remain on the market.
The new guidance would allow those plans to be renewed again as late as Oct. 1, 2016, meaning that some consumers could hold on to their healthcare plans into 2017.
The practical effect of the new extension may be limited. Officials said they believe that the number of consumers covered by plans that don’t meet the law’s standards will be significantly lower by 2016 because of the usual churn in the market for individual insurance.
“The expectation is that this will be a very small number of people,” a senior official said.
However, the new extension may defuse a political time bomb that the administration would have faced later this year if some consumers had once again received notices canceling their insurance plans just ahead of the November elections.