The Obama administration said on Wednesday it would allow health insurers to extend plans that fail to comply with its signature healthcare law for an additional two years, giving some consumers the option of keeping their policies into 2017.
In a release of comprehensive insurance guidelines for next year, officials also said the government was extending the 2015 open enrollment by one month to create a three-month period running from Nov. 15, 2014, to Feb. 15, 2015.
The guidelines also presented an early glimpse of the cost of Obamacare-compliant plans, saying the annual cap on out-of-pocket expenses for consumers would rise to $6,600 for individuals and $13,200 for families. Expenses are currently capped at $6,350 for an individual and $12,700 for a family.
The change in the renewal policy could help Democrats in November's congressional elections by eliminating the possibility of a new wave of insurance plan cancellations just before the vote. It also allows some policies to be continued past the November 2016 presidential election.
But administration officials described the guidelines as a response to conversations with a range of stakeholders including consumers, insurers and state regulators. They said the number of people affected, estimated at between 500,000 and 1.5 million, was expected to shrink rapidly as consumers shift into Obamacare-compliant policies.
The initial decision to allow one-year renewals last November followed a public outcry as millions of consumers received notice from insurers that their plans would be canceled because they did not comply with Obamacare's consumer protection standards.
Officials said on Wednesday the change would require them to adjust a risk mitigation program to protect insurers from unexpected losses, and indicated that they could relax a consumer-protection rule that currently prohibits insurers from spending more than 20 percent of plan revenues on administrative costs including marketing.
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