White House Move to Limit Insurance Cancellations May Backfire

Seeking to defuse a growing political furor as millions of Americans receive cancellation notices from health insurers, the Obama administration will not require insurance companies to upgrade existing individual plans to meet the requirements of the federal healthcare law for 2014.

The announcement comes a day after the administration reported that just 106,000 Americans enrolled in private plans through the law's health insurance exchanges through Nov. 2. A number of Democrats have signaled they would support legislation to address the cancellations and the troubled rollout of the exchanges.

“This fix won't solve every problem for every person, but it's going to help a lot of people,” President Barack Obama said in announcing the change during a White House briefing Thursday.

But the change, which administration officials said can be done without legislation, could lead to increased premiums and undermine the risk pool for the fledgling state and federal insurance exchanges. In addition, insurance commissioners in at least two states—Washington and Arkansas—quickly indicated that they would not allow insurance firms to reinstate canceled plans.

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Source: Modern Healthcare