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Obamacare chaos now spreads to individual mandate

President Barack Obama speaks during an end-of-the year news conference in the Brady Press Briefing Room at the White House in Washington, Friday, Dec. 20, 2013.
President Barack Obama speaks during an end-of-the year news conference in the Brady Press Briefing Room at the White House in Washington, Friday, Dec. 20, 2013.
Susan Walsh, Associated Press

With the health care website struggling since October and the kerfuffle over canceled insurance plans putting Democratic office holders on defense, the Obama administration announced on Friday that individuals whose plans were canceled will be exempt from the individual mandate for one year.

The requirement for the exemption is that the customer must have had their existing plan canceled due to Obamacare regulations and they find the current options offered them on the exchange unaffordable.

"The administration also said people who had their plans cancelled could get a scaled-back catastrophic plan, which has more limited benefits than those included in other Obamacare health plans," Politico reported.

The new exemption was apparently driven by the political concerns of Democratic office holders who had been pressing for the change.

"The initial concerns were raised by Sens. Jeanne Shaheen of New Hampshire, Angus King of Maine, Mary Landrieu of Louisiana, Heidi Heitkamp of North Dakota, and Mark Warner and Tim Kaine of Virginia," The Washington Times Reported.

Shaheen in particular has been under pressure in her fight for re-election. A viral ad is now making the rounds excoriating Shaheen for her vocal defense of Obamacare, showing her echoing Pres. Obama's promise that "if you like your plan you can keep your plan." The ad concludes, "If you like your senator you can keep your senator. If not, you know what to do."

"Kathleen Sebelius, the secretary of health and human services, disclosed the sudden policy shift in a letter to Senator Mark Warner, Democrat of Virginia, and five other senators," The New York Times reported. "It was another effort by President Obama to cushion the impact of the health care law and minimize political damage to himself and Democrats in Congress who adopted the law in 2010 over solid Republican opposition."

At Forbes, longtime critic of the Affordable Care Act Avik Roy wrote that this "most recent announcement from the Obama administration is the first time it has publicly admitted that Obamacare is making health insurance less affordable, not more so, for millions of Americans."

Roy also argued that the "new 'hardship exemption' will encourage healthier individuals, whose expected spending would be low, from dropping out of the pool. As a result, average spending per enrollee on the exchanges is likely to be substantially higher than the insurers had planned for, forcing them to lose money on their policies."

But it wasn't just critics who were put off by the sudden policy change.

The Washington Post's Ezra Klein, a defender of the law, wrote that "this puts the administration on some very difficult-to-defend ground. Normally, the individual mandate applies to anyone who can purchase qualifying insurance for less than 8 percent of their income. Either that threshold is right or it's wrong. But it's hard to argue that it's right for the currently uninsured but wrong for people whose plans were canceled."