Insurers Say Latest ObamaCare News Will Cause ‘Tremendous Instability’

In an 11th-hour change, the Obama administration announced significant changes to the health care law for people who recently lost their insurance coverage and are struggling to get a new plan. The latest unilateral move immediately drew criticism from the insurance industry, and Republicans.

Health and Human Services Secretary Kathleen Sebelius confirmed the changes, which include letting those individuals skirt the law’s individual mandate, in a letter to senators. She said she would allow people who got cancellations and could not find affordable new coverage to qualify for a “hardship exemption” in order to avoid a penalty next year for not having insurance.

She also announced that those individuals will be able to purchase catastrophic plans, offering the bare necessity of coverage, which were only now available for people under 30.

The move, though, to allow potentially hundreds of thousands of people to sign up for “catastrophic” coverage plans was criticized by the insurance industry as a shift that would cause “tremendous instability.”

The administration, dropped the latest ObamaCare news bomb as President Obama was ready to fly to Hawaii for Christmas vacation. They scoffed at those who are concerned about the sudden change, saying they expected it to impact fewer than 500,000 people.

Health and Human Services spokeswoman Joanne Peters said, “This is a common sense clarification of the law. For the limited number of consumers whose plans have been cancelled and are seeking coverage, this is one more option.”

But an insurance industry official and spokesman for America’s Health Insurance Plans, Robert Zirkelbach, said, “This type of last-minute change will cause tremendous instability in the marketplace and lead to further confusion and disruption for consumers.”

Democrats gave the Obama administration accolade for taking the steps insurers worry will only help to set off a death spiral, with Republicans criticizing the move as just another patch on an otherwise unworkable law.

“Holding a fire sale of cheap insurance is not a responsible fix for a broken program. This is a slap in the face to the thousands of Americans who have already purchased expensive insurance through the ObamaCare exchanges,” Sen. Marco Rubio (R-FL) said in a statement.

House Energy and Commerce Committee Vice Chairman Marsha Blackburn (R-TN), described the move as “another major policy shift” from the Obama administration.

“We asked Secretary Sebelius point blank what would be the next holiday surprise, and she was silent. Yet, here we are with another major policy shift. The sad reality is that when the law takes effect come January 1, more Americans will be without coverage under Obamacare than one year ago,” Blackburn said in a statement released Thursday evening.

“Less than two weeks from going live, the White House seems to be in full panic mode. Rather than more White House delays, waivers, and exemptions, the administration should provide all Americans relief from its failed law.”

The administration estimated that less than 500,000 those who have not yet found other coverage in the wake of seeing their coverage canceled.

Insurers are now more concerned than ever that young, healthy Americans who potentially would have bought full coverage may now stay out of the market, leaving insurers with a group of patients in worse health overall. Premiums would necessarily skyrocket, causing a death spiral.