Obama administration pushes back over cancelled health plans


By David Morgan and Roberta Rampton

WASHINGTON, Nov 5 (Reuters) - The Obama administration,under pressure over the botched opening of its healthcarewebsite, announced new efforts on Tuesday to appease hundreds ofthousands of people whose coverage is being cancelled asinsurers prepare for reforms in 2014.

Officials said many cancellation victims hear only aboutcostly replacement plans from their insurers and not aboutoptions available through new online healthcare marketplacesthat can offer plans with lower, subsidized premiums. To thatend, the administration is seeking to broaden the messageconsumers receive from insurers and the government.

White House Chief of Staff Denis McDonough urged a group ofinsurance executives to tell consumers in cancellation noticesthat they could qualify for premium tax credits through themarketplaces that have been set up in all 50 states and theDistrict of Columbia.

"He's saying that we all need to do the best we can ingetting information that consumers need," White House spokesmanJay Carney told reporters.

In a sign that things are already changing for people whosepolicies have been cancelled, California officials announcedthat a major insurer - Blue Shield of California Life and HealthInsurance Co - has agreed to allow 115,000 state consumers whohad been notified of cancellations would be able to keep theirlower priced policies through the first quarter of next year.

Under the health insurance program known as Obamacare, it ismandatory for everyone to have health insurance or pay a fine.The Patient Protection and Affordable Care Act was passed in2010 and upheld by the U.S. Supreme Court last year.

Republicans have opposed the program, President BarackObama's signature domestic policy achievement, as an unwarrantedexpansion of the federal government.

Also on Tuesday, the head of the federal agency responsiblefor the Obamacare rollout said her staff is working on a plan to get the attention of people whose plans have been cancelled.

"This is actually a conversation we're having today ... Isthere a way we can actively engage to reach out to people whohave been canceled?" Marilyn Tavenner, administrator of theCenters for Medicare and Medicaid Services told the SenateHealth Education Labor and Pensions Committee.

"Although they're cancelled, they are offered anotherpolicy," Tavenner said. "But I think what's important for themto understand is, it's not just that policy, it's also theability to go on the exchange."

The cancellations are a challenge for Obama, who promised in2009 that under the new law, people with insurance would be ableto keep their existing plans if they wanted to.

In the face of mounting criticism from Republicans andothers, the administration has sought to minimize the issue bysaying the cancellations affect less than 5 percent of theinsurance market.

The new marketplaces offer consumers a flawed option in the36 states served by the federal healthcare website,HealthCare.gov., which has been plagued by technical problemssince it opened for enrollment on Oct. 1.

The administration had expected about 800,000 enrollees inOctober and November. But the problems reduced that to atrickle. The government will release the month's enrollmentfigures next week.

Officials are racing to fix the website's problems by theend of November in hopes that people will be able to enroll byDec. 15. The law calls for new coverage to kick in on Jan. 1.

During a 2-1/2 hour hearing in the Senate, even members ofObama's Democratic party made plain their concerns.

"There's been fear, doubt and a crisis of confidence," saidSenator Barbara Mikulski, a Maryland Democrat. "What I worryabout is that there's such a crisis of confidence that peoplewon't enroll."

Tavenner said the administration plans to start a fourmonth-long media campaign in selected markets next month aimedat bringing back uninsured Americans, particularly young adults,who were unable to enroll.

"Our goal is to stabilize the website this month and then wedo have a targeted plan that includes not only young people butthe large populations of the uninsured," Tavenner said.

Separately on Tuesday, two hospital operators -- TenetHealthcare Corp and HCA Holdings Inc -- saidHealthCare.gov's technical problems were gradually diminishing.

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