Obama Moves to Avert Cancellation of Insurance

The decision to allow the policies to remain in effect for a year without penalties represented the Obama administration’s hurriedly developed effort to address one of the major complaints about the beleaguered health care law. It seemed for the moment to calm rising anger and fear of a political backlash among congressional Democrats who had been threatening to support various legislative solutions opposed by the White House because of their potential to undermine the law.

Senate Democratic leaders said they did not see the need for an immediate legislative fix — a victory for White House officials worried that momentum was building toward consideration of a measure to force the change.

The Republican-controlled House is still set to vote Friday on a bill by Representative Fred Upton, Republican of Michigan and chairman of the Energy and Commerce Committee, that would allow Americans to keep their existing health coverage through 2014 without penalties — as well as allow new people to continue to buy the plans, something the White House said would gut the Affordable Care Act.

The president’s announcement on Thursday seemed to limit Democratic defections, with only two dozen or so House Democrats now expected to support Mr. Upton’s bill. Without the presidential action, officials said, scores of Democrats might have joined Republicans in approving the Upton measure.

It remained unclear, however, just how much impact the fix delivered by an apologetic Mr. Obama would actually have. Though his proposal grants discretion to insurers to allow people to stay on their existing plans, there is no guarantee that insurers will do so, or that the states will allow such renewals.

Also unclear are what prices will be charged by insurers for existing policies that are continued in force through 2014. Insurers generally did not have rates approved for the renewal of such coverage because the policies were supposed to be terminated at the end of this year.

Some state insurance commissioners caught off-guard by the announcement said they did not intend to allow insurers to reinstate the policies. And insurance companies denounced the president’s action.

“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers,” said Karen M. Ignagni, the president of America’s Health Insurance Plans, a trade group.

“Premiums have already been set for next year based on an assumption about when consumers will be transitioning to the new marketplace,” she said. “If now fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase, and there will be fewer choices for consumers.”

The National Association of Insurance Commissioners, representing state officials, and the American Academy of Actuaries, a nonpartisan professional group, said the move could threaten the viability of insurance markets operating under rules that provide consumers with new protections starting in 2014.

Republicans portrayed the policy switch as an effort to shift blame to insurance companies. Speaker John A. Boehner dismissed the president’s act and said the White House could not be trusted on the issue.

“Promise after promise from this administration has turned out to be not true,” Mr. Boehner said. “So when it comes to this health care law, the White House doesn’t have much credibility. Now, let’s be clear. The only way to fully protect the American people is to scrap this law once and for all. There is no way to fix this.”

Still, the president told reporters that the changes should allow many people to retain their health care plans for a year despite having received letters saying they could no longer keep their insurance.

“This fix won’t solve every problem for every person, but it’s going to help a lot of people,” said Mr. Obama, who repeatedly took personal responsibility for misrepresenting the law and saying Americans who like their coverage would be able to keep it.

“I completely get how upsetting this can be for a lot of Americans, particularly after assurances they heard from me that if they had a plan that they liked they could keep it,” Mr. Obama said. “And to those Americans, I hear you loud and clear. I said that I would do everything we can to fix this problem. And today I’m offering an idea that will help do it.”

The president’s plan would apply only to people who have policies that are being canceled. Those currently without insurance would not be able to buy the old plans.

Senator Mary L. Landrieu of Louisiana, one of the first Democrats to break with the White House over allowing people to keep their current plans, said the president’s announcement was a welcome development but stressed that Congress might still need to go further — a sentiment shared by other Senate Democrats facing re-election next year.

“The president’s announcement this morning was a great first step, and we will probably need legislation to make it stick,” Ms. Landrieu said. She has offered her own legislation that would allow people to stay on their current insurance plans indefinitely, but indicated that she was open to letting the president’s fix supersede hers if it went far enough.

Representative Nancy Pelosi of California, the House Democratic leader, said that while her members were “very pleased” with the president’s plan, some were still clamoring for a fix on top of what he was offering. Many of them, she said, were those who fought hard for the law’s passage and wanted to see it saved.

On Friday, House Democratic leaders are expected to offer a plan that would build on Mr. Obama’s solution and give their members additional political cover, though it is likely to be rejected by their Republican counterparts.

Eager to avoid opening the measure to legislative attack in Congress, the White House used administrative authority to let insurers renew their current policies. Mr. Obama’s action represented a sweeping assertion of presidential authority to delay enforcement of certain provisions of federal law — provisions at the heart of the health law.

The president’s “transition policy” was set forth in a letter to state insurance commissioners from Gary M. Cohen, the director of the federal Center for Consumer Information and Insurance Oversight.

Under the policy, Mr. Cohen said, “health insurance issuers may choose to continue coverage that would otherwise be terminated or canceled, and affected individuals and small businesses may choose to re-enroll in such coverage.”

People who keep the policies will be unable to obtain financial assistance available for new coverage purchased through insurance exchanges. If an insurer chooses to reinstate coverage that has been canceled, it must notify policyholders that they have a right to obtain coverage that complies with the law and provides additional benefits.

The administration said it would consider the impact of the transition policy in deciding whether to extend it beyond 2014.

Even those lawmakers who were pleased with Mr. Obama’s change of position expressed frustration with the overall rollout of the law.

“Who could be happy with it?” said Representative Juan C. Vargas, Democrat of California. “The reality is they didn’t do a good job — all these years to prep for it. Someone messed up, and someone’s head ought to roll.”