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Renewal time extended for noncompliant health plans

2-year reprieve to aid Democrats in 2014 elections

WASHINGTON — The Obama administration said Wednesday that it would allow consumers to renew health insurance policies that do not comply with the Affordable Care Act for two more years.

The action helps Democrats in tight midterm election races because it avoids the cancellation of insurance policies that would otherwise have occurred at the height of the political campaign season this fall.

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Administration officials said that people would be able to keep noncompliant policies through 2016 if state officials agreed.

In November, President Obama asked state officials and insurers to allow the continuation of noncompliant policies through this year, and he apologized for having promised — inaccurately — that people who liked their health insurance coverage could keep it.

White House officials said Obama was trying to smooth the transition to a new health insurance system.

“This approach incorporates the flexibility that exists under the law,” said a senior administration official.

Republicans said they were not surprised by the president’s latest move. Indeed, they said it confirmed their contention that parts of the health care law were unpopular and unworkable.

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The reprieve for noncompliant policies was the latest in a series of waivers, deadline extensions, delays, and dispensations announced by the administration. Lawyers said Obama was testing the limits of his powers.

“I support national health care, but what the president is doing is effectively amending or negating the federal law to fit his preferred approach,” said Jonathan Turley, a law professor at George Washington University. “Democrats will rue the day if they remain silent in the face of this shift of power to the executive branch.”

Turley said that Obama was setting precedents that could be used by future presidents to delay other parts of the health care law — or to suspend laws dealing with taxes, civil rights, or protection of the environment.

The new health care law, adopted in 2010, sets dozens of federal standards for health insurance, requiring coverage of services in 10 specific areas and providing many consumer protections not found in older insurance policies. Starting last fall insurers canceled many insurance policies for individuals and small businesses because they did not meet the law’s minimum coverage requirements.

The cancellation notices, sent to several million people, touched off a political furor that threatened the electoral prospects of Democratic candidates, including many who had voted for the Affordable Care Act. One Democrat, Senator Mary L. Landrieu of Louisiana, has offered legislation that would allow people to keep their current insurance plans indefinitely if they continue paying premiums.

Under the transition policy announced by Obama in November, insurers “may choose to continue coverage that would otherwise be terminated or canceled.” Insurers were allowed to renew existing policies even if they did not provide the “essential health benefits” prescribed by law.

In addition, the administration said, insurers could continue charging women more than men and could set higher premiums based on a person’s health status, in violation of the new law.

White House officials said Wednesday that the administration was extending the transition policy so that consumers could renew 2013 health plans for two additional years.

Republicans cried foul.

“Clearly, the president admits that Obamacare has failed by trying to hide its full effects from voters until he is safely out of office,” said Rory Cooper, a spokesman for Representative Eric Cantor of Virginia, the House majority leader. “They won’t be fooled.”

In response to Obama’s request in November, at least 27 states have allowed renewals of polices that do not comply with the new law, according to the National Association of Insurance Commissioners.

Robert Laszewski, a consultant who works closely with insurers, said the reprieve for noncompliant policies “tends to undermine the sustainability of Obamacare” by reducing the number of people who will buy insurance through the exchanges.

The troubled rollout of the health care law has prompted the White House to revise many deadlines and requirements.

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