Americans who had their insurance policies canceled as changes under the Affordable Care Act took effect will temporarily be exempt from the health law’s requirement that all Americans have insurance, the Department of Health and Human Services (HHS) announced in new guidance Thursday evening. The change comes just four days before the deadline for signing up for Obamacare plans that takes effect on January 1.
While the Healthcare.gov website has seen marked improvements and state signups surged over the last month, some consumers have still had problems with signing up. That’s been particularly troublesome for a subset of people who had skimpy insurance policies that are being phased out under the health law.
Some of these consumers feared that the glitchy enrollment process would at least temporarily prevent them from getting replacement coverage by the time their old plans expire; others have loudly protested that the more robust Obamacare policies cost more than their plans in the pre-ACA market, which tended to lack certain benefits like hospital stays and prescription drugs or had annual and lifetime coverage caps.
The administration claims that just under half a million people with canceled plans have yet to sign up for new policies. If they want to, these Americans will now be able to claim a “hardship exemption” from the law, meaning they won’t be subject to the individual mandate or its penalties. They will also be eligible to buy bare-bones, catastrophic insurance plans on the Obamacare marketplaces that were only meant to be available for people under 30. Those plans aren’t eligible for federal subsidies — but they have, on average, 20 percent lower premiums than other policies on the marketplaces, according to the administration.
Thursday’s announcement is just the latest in a series of steps that HHS has taken to address the concerns of people facing potential coverage disruptions. In the last several weeks, the administration has extended the deadline for paying for coverage that takes effect in the New Year to January 10; extended a temporary program for the sickest Americans with pre-existing conditions; urged insurance companies to honor prescription drug refills issued under canceled plans; and encouraged insurers to treat out-of-network providers as if they were in network in January in the case of someone with a serious illness or injury.