Feds open catastrophic plans to displaced customers
Americans who haven't replaced their canceled health insurance plans can now buy catastrophic coverage and receive a temporary hardship exemption from the individual mandate, the White House announced Thursday.
U.S Department of Health & Human Services Secretary Kathleen Sebelius communicated the policy change in a letter to U.S. senators who wrote to her on behalf of constituents upset that they lost coverage, The Washington Times noted.
The reason for the change, Sebelius' letter said, was to ensure "the smoothest transition possible" for uninsured people "having difficulty finding an acceptable replacement [plan] in the marketplace."
Responding to public din after insurance cancellations, President Barack Obama proposed a temporary reinstatement of canceled plans; but when some states rejected that fix, finding another way to help the insurance-deprived became necessary, according to The New York Times.
Catastrophic plans offer skeletal coverage that's meant for customers under the age of 30, ABC News reported. Accordingly, catastrophic plan premiums are about 20 percent lower than those of other exchange plans, Sebelius' letter said. What's controversial about using catastrophic plans as a last-minute stopgap is that the Obama Administration once called them substandard, The Washington Times noted.
Already beset by the challenges of operationalizing reform, payers objected to another Affordable Care Act requirement dropped on their doorsteps without warning. "This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for customers," Robert Zirkelbach, spokesman for America's Health Insurance Plans, told ABC. AHIP previously proposed accommodating the uninsured by allowing 10 extra days to pay January premiums.
Finally, Republican leaders criticized the Obama administration for changing ACA policy on the brink of today's individual health insurance enrollment deadline.
"Holding a fire sale of cheap insurance is not a responsible fix for a broken program," Senator Marco Rubio (R-Fla.) told The Washington Times. "This is a slap in the face to the thousands of Americans who have already purchased expensive insurance through the Obamacare exchanges."
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