The estimated number of people to be affected was approximately 500,000 according to senior administration officials.
"If you have been notified that your individual market policy will not be renewed, you will be eligible for a hardship exemption and will be able to enroll in catastrophic coverage," the Centers for Medicare and Medicaid Services says in a new statement posted on its website.
Several people felt that the new policies in accordance to the Affordable Care Act were more expensive than their older policies. Health experts feel this is because the old policies provided less than basic coverage.
Health and Human Services Secretary describes the individual insurance market as "volatile" in a letter to Virginia Sen. Mark Warner outlining the latest policy change. "Even though the Affordable Care Act will offer more coverage choices and protections for millions of Americans, we are committed to ensuring the smoothest transition possible for those who need to find a new health plan," she writes.
"If you believe that the plan options available in the Marketplace in your area are more expensive than your cancelled health insurance policy, you will be eligible for catastrophic coverage if it is available in your area," the CMS says. "In order to purchase this catastrophic coverage, you need to complete a hardship exemption form, and indicate that your current health insurance policy is being cancelled and you consider other available policies unaffordable."
Health and Human Services Department spokeswoman Joanne Peters said it's a "common sense clarification". "For the limited number of consumers whose plans have been cancelled and are seeking coverage, this is one more option," she said.
Insurers were not happy about it "This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers," said America's Health Insurance Plans' (AHIP) President and CEO Karen Ignagni.
The health insurance exchanges were meant to be pivotal for the health reform but the federally run exchange were full of problems as soon as they went live and though the administration worked on setting it right many people are still unable to enroll for health insurance.
Officials declared that the exchanges would be open on the 1st of January and they would have staff working across 17 states. 2 million emails were sent to people facing problems to sort them out, as well as 600,000 phone calls were made in a bid to ensure people could enroll without issues.
Hannah Punitha (IRDA Licence Number: 2710062)
Maggie, December 2013