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President Barack Obama announced a fix to the vexing problem of cancelled health insurance policies Thursday, saying insurers don't have to cancel plans next year just because of the Affordable Care Act.
Insurers can continue the plans for 2014 on two conditions - they have to tell people just what their plans don't cover, and they have to tell people that they do have the option of going onto the health insurance exchanges to buy new plans with federal government subsidies and perhaps even to go onto Medicaid.
"Insurers can offer consumers the option to renew their 2013 health plans for 2014 without change, essentially allowing consumers to keep those plans," a senior White House official said, speaking on condition of anonymity.
Obama knew people would lose insurance
Critics of the health reform law, known widely as Obamacare, have made hay with reports that tens of thousands of people have been getting cancellation notices from their insurance companies, despite Obama's repeated promises that people who like their insurance plans can keep them.
One main goal of Obamacare was to get rid of what the White House has called the worst abuses of the insurance industry -- caps on coverage, policies that charged women three to five times what a similar man was charged, policies that didn't pay for cancer screening.
Some of the policies that have been cancelled were very inexpensive, part of the reason for the outrage among those whose policies were canceled. But insurance and health industry experts say it's because they were so bare-bones, they wouldn't have paid for much if they were ever needed. The White House keeps stressing that the new rules level the playing field a little bit, but offer most people much more in terms of coverage than what they had before.
Health and Human Services Secretary Kathleen Sebelius has also pointed out that the policies being cancelled are mostly individual policies, not the big group policies offered by employers that cover most Americans. Those policies often change every year anyway, HHS says.
According to America's Health Insurance Plans, the industry's group, 19 million Americans have individual plans.
Democrats who support the law have been pushing the White House to come up with some way to fix the problem. Health officials point out that it's a very small percentage of people who are actually affected by the cancellations, but the political and public relations damage has been extensive.
Obama apologizes to people who lost insurance
The new plan being announced by Obama gets out in front of a Republican-crafted plan that was due to come up in Congress on Friday. House minority leader Nancy Pelosi called that GOP proposal "a very dangerous bill" that is "completely disruptive" to the insurance pools, characterizing it as simply another Republican attempt to gut - not repair - the underlying health care bill.
She said that Democrats will try to present their own legislative fix for a vote on Friday to complement Obama's "administrative" approach.
"We are in agreement. We must have a fix, and we will," she said.
One fear is that if too many people are allowed to keep their older, cheap policies, they won't join the pool of people buying on the exchanges - and that'll drive up prices next year for everyone else. The more healthy people are in the pool buying policies, the more they offset the sicker people in the pool, and the less insurance companies can charge everyone. White House officials said they'll watch and see what happens in the next year, and tweak as necessary.
Price is the main concern of most Americans when it comes to buying insurance, and the Obama administration is keen to be able to say Obamacare is keeping prices low.
Carrie Dann and Mike O'Brien contributed to this story