White House Announces Another Rule Change For Affordable Care Act

The White House announced another rule change for people signing up for health insurance under the Affordable Care Act. Just in time for the holiday rush, the Obama Administration said people whose policies have been cancelled will be allowed to buy so-called catastrophic coverage plans. The high-deductible, low-premium plans that cover the basics and not much more had previously been limited to people under the age of 30 who had demonstrable financial need.

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MELISSA BLOCK, HOST:

At that news conference today, President Obama also trumpeted the rising number of people signing up for health care coverage under the Affordable Care Act, half a million in the last three weeks. That announcement comes as the Obama administration makes another rule change for those who are signing up. This change is aimed to people who've had insurance policies canceled, presumably because those policies don't meet the requirements of the new law. So last night, the administration said that those people are now allowed to buy catastrophic insurance instead. Those are cheaper, more limited plans. Until now, those policies have been limited to people under the age of 30 and people who could demonstrate financial hardship.

NPR's Julie Rovner joins us now to talk about this. And, Julie, tell us more about who is going to be covered now by this policy change.

JULIE ROVNER, BYLINE: Well, it's pretty broad. Technically it's anyone who's bought their own insurance, had that insurance canceled and, quote, "considers other available policies unaffordable." We're, frankly, still not sure exactly how many people that was but it was likely a couple of million. Now, the administration has been saying that most of the people who got their policies canceled have by now found other coverage. They say there's less than half a million people who are still looking for new insurance and most of them will find other options. Here's how President Obama put it in his news conference.

PRESIDENT BARACK OBAMA: This is essentially a additional net in case folks might have slipped through the cracks.

ROVNER: But it's not clear whether or not some of those people who already signed up for more expensive plans might drop those and buy the catastrophic coverage instead. If that coverage hasn't started yet, they probably can do that.

BLOCK: And, Julie, tell us more about this catastrophic coverage plans, because we haven't really been hearing that much about them.

ROVNER: No, we really haven't but it is an available option in most places. These plans were intended to be there for people under age 30 and those who could demonstrate a serious financial hardship that makes buying more expensive plans truly unaffordable. Those hardships include things like having recently filed for bankruptcy or being homeless. Now, these plans are a little bit more robust, if you will, than some bare-bones plans that used to be available on the individual market. They cover all the required preventive care with no deductibles or copayments. They cover up to three primary care visits a year, but they then don't cover anything until you reach a pretty high deductible, $6,300 for an individual in 2014. After that, most care would be covered.

BLOCK: Now, Julie, with this hardship exemption, the people could also opt not to have insurance at all, right?

ROVNER: That's right. The hardship exemption means you are excused from having to pay any penalty for not having insurance. But most experts think it's unlikely that many of the people whose policies got canceled will go without insurance or will want to go without insurance. After all, these were people who were already buying their own insurance in the individual market without any help from an employer or the government.

BLOCK: And, Julie, the insurance industry has not been pleased by this rule change. What have they been saying?

ROVNER: That's right. You know, they set prices for these catastrophic plans assuming they would be largely confined to young, mostly healthy people. After all, young people who thought they would - were likely to need care would opt for more comprehensive coverage. Now, if there's an influx of older people, companies could take a big loss on the plans. At the same time, every person who buys a catastrophic plan is one less person who buys the more expensive, more comprehensive plans. And the insurance companies really want as many people as they can get in the more comprehensive plans to make sure they have a good mix of sick and healthy people.

BLOCK: And lastly, Julie, let's talk about the new numbers. The President said 500,000 people have signed up for coverage under the Affordable Care Act since December 1st.

ROVNER: That's right, very brisk enrolment. So altogether, since October 1st, a million people have signed up in both the federal and state exchanges. And nearly 4 million people have been found eligible for Medicaid or the children's health insurance plan. That's for just October and November. Clearly, the administration wanted to get those numbers out to refute claims by critics that more people might have lost insurance through these cancelations than gained it during these last three months of open enrollment.

BLOCK: OK. NPR's Julie Rovner. Julie, thanks.

ROVNER: Thank you.

BLOCK: And we've developed a set of frequently asked questions, FAQs, on some of the more common questions people have been asking us. You can find that at npr.org/aca.

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