Administration Puts Off an Obamacare Penalty

Move is the latest by Obama to soften some immediate effects of the Affordable Care Act

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The Obama administration scaled back another part of the new health care reform law late Thursday,¬†allowing people whose health insurance policies were canceled to buy catastrophic insurance and saying they won’t face a penalty if they don’t buy insurance next year.

Secretary of Health and Human Services Kathleen Sebelius announced the rule change in a letter to senators, the New York Times reports. The policy shift is the latest attempt by the Obama administration to assuage concerns about the law, which has been hobbled by a rocky implementation that included canceled policies and a glitch-ridden insurance exchange website.

The Department of Health and Human Services issued a statement Thursday advising consumers that if their policies were not renewed, they were eligible for a “hardship exemption” and would be allowed to enroll in a plan for catastrophic coverage, the Times reports.

Insurance trade groups have said that the latest rule change will cause further confusion and disruption in the marketplace.