WASHINGTON —Americans whose insurance policies were canceled this year will be excused from paying fees due to the individual mandate, the Department of Health and Human Services said in a letter sent to lawmakers.
The Affordable Care Act already included a "hardship exemption," and several lawmakers had argued that having a policy unexpectedly canceled because it did not fit the coverage requirements of the new law should qualify as a hardship because it comes through no fault of the consumer.
Those whose plans were canceled will also be able to buy catastrophic coverage, which previously had been available only to people younger than 30. Those policies tend to cover fewer things and cost less than the policies now required by the law.
"The president and I want to do everything we can to ensure that individuals with canceled plans have as many options as possible," Health and Human Services Sebelius wrote in a letter sent Thursday to Sen. Mark Warner, D-Va., and five other senators who had asked about the exemption. "I agree with you that these consumers should qualify for this temporary hardship exemption, and I can assure you that the exemption will be available to them."
The mandate requires that anyone who does not have health insurance in 2014 pay a fee when they turn in their 2014 tax returns.
"This is a common sense clarification of the law," Health and Human Services spokeswoman Joanne Peters said. "For the limited number of consumers whose plans have been canceled and are seeking coverage, this is one more option."
Not everyone is happy about the change.
"This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers," said America's Health Insurance Plans'President Karen Ignagni in a statement.
Republican lawmakers used the change as an opportunity to attack the law. Sen. Marco Rubio, R-Fla., called the change an acknowledgement "that more Americans have lost health insurance than gained it" under the law. He again called for the law to be repealed.
Thursday, four senior administration officials said that fewer than 500,000 people may not have insurance come Jan. 1 after they received cancellation notices in October.
That's because, they said, many of the people who originally received cancellation letters have been automatically enrolled in new plans by their insurers; state regulators have approved their current plans on President Obama's request; insurers have presented different options to keep their customers and people with insurance have been more likely to shop for new policies to avoid gaps in their coverage.