Obama Said to Let States Reinstate Canceled Health Plans

Obama to Speak on Health Law Fixes as Democrats Seek Action
Obama will speak at the White House at about 11:35 a.m. Washington time, shortly before top aides were to meet with Democrats to discuss proposed action. Photographer: Kristoffer Tripplaar-Pool/Getty Images

Nov. 14 (Bloomberg) -- States can reinstate for a year health-insurance plans slated to be canceled or lapsed at the end of December under a policy President Barack Obama will announce today, two people familiar with the decision said.

Obama is expected to announce the new policy at about 11:35 a.m. Washington time, shortly before top aides are to meet with Democrats to discuss proposed action.

The change, aimed at defusing a political crisis caused by cancellation letters hundreds of thousands of Americans have received from their insurers, will be effective for one year, until the end of 2014. It will be left to state governors and insurance commissioners to decide whether they want to preserve plans that would otherwise be canceled, said one of the people.

House Democrats yesterday confronted David Simas, the deputy senior adviser to the president, and Mike Hash, the director of the Office of Health Reform at the Department of Health and Human Services, during a closed-door meeting.

“A lot of Democrats are very upset that this happened, No. 1, and urging for there to be an immediate fix for it,” Representative Patrick Murphy, a Florida Democrat, told reporters after the meeting.

Current Plans

The policy change applies only to current insurance plans and will not enable carriers to issue new coverage that doesn’t comply with requirements of the 2010 Patient Protection and Affordable Care Act, said the people, who asked not to be identified because the policy isn’t public.

Obama’s chief of staff, Denis McDonough, will meet today with Senate Democrats who have been lobbying for action. The White House also plans a briefing for House Democrats, some of whom said they would back a Republican bill scheduled for a vote tomorrow unless Obama comes up with a remedy.

The House legislation, by Representative Fred Upton, a Michigan Republican, would allow people to keep existing policies through the end of 2014.

Representative Mike Doyle, a Pennsylvania Democrat, said many of the party’s lawmakers will support Upton’s bill if they have no alternative.

“What we said to the administration is, if you don’t give us something else before Friday, I think you’re going to see many Democrats, as a way of sending a message to the American people and the White House, that we believe this needs to be fixed and it needs to be fixed now,” Doyle said this morning on MSNBC’s “Morning Joe” program.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net