Obama Administration Delays Individual Mandate for People Whose Insurance Policies Were Canceled

People whose health insurance plans were canceled
as a result of Obamacare will not be subject to Obamacare’s penalty
for being uninsured next year, the administration announced
tonight. People whose plans were canceled and are having difficulty
paying for a new plan will also be allowed to purchase catastrophic
health plans from the exchanges, which had previously been
available only to people under the age of 30. 

The way this works is that the law allows for a hardship
exemption for people who don’t have access to affordable coverage.
The White House previewed this argument back in October, when press
secretary Jay Carney talked around questions about delaying the
individual mandate,
saying that ““as written, it is clear that people without
access to affordable care will not be penalized.”

The move is likely to create two political problems for the
administration. The first is that insurers don’t like it. Health
insurance trade group AHIP saying that the adjustment “could cause
significant instability” in the insurance marketplace and lead to
“further confusion and disruption” for health insurance
beneficiaries. 

The second is that it’s hard to justify offering this exemption
to the previously insured but not to those who were previously
uninsured. A person’s plan is canceled, and as a result that person
is not subject to the mandate. But if that person was not insured
this year, a person who is otherwise exactly the same is subject to
the fine? Good luck selling that one. 

Back in July, the administration issued a
strongly worded veto threat for a House bill to delay the
mandate for everyone by a year.