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Health policy cancellations: New blow for Obama administration

Many are getting hit with cancellation notices because their health care plans don't quality under the new law.
October 29, 2013 12:00:00 AM PDT
Many people are getting hit with cancellation notices because their existing health care policies don't quality under the new health care law.

"I want to apologize to you that the website has not worked as well as it should," Medicare chief Marilyn Tavenner said at the start of her testimony before House members on Tuesday. She was grilled not only on what went wrong, but also whether they can trust promises that things will be running efficiently by the end of November.

One of the president's earliest promises about the health care overhaul was - You can keep your plan if you like it. That's not exactly the case for Natasha Lee.

"It's a little bit of a price shock," Lee said.

Lee is a freelance photographer who just received a letter saying her current policy is being canceled. A new similar policy she says will cost her three times more. She's considering not getting health insurance at all.

Along similar lines, a wave of cancellation notices hitting small businesses and individuals who buy their own insurance. Tavenner said it's not the administration but insurers who are responsible for cancellation letters now reaching many of the estimated 14 million people who buy individual policies.

According to insurance industry officials, the majority of Americans with individual plans will find their policies changed or even canceled under the rules of the Affordable Health Care Act. The White House says those whose plans change drastically will be able to buy more comprehensive coverage.

"One of the addressed issues that the Affordable Care Act was designed to address was the need to provide greater security to those Americans who had no other option," said Jay Carney, the White House Press Secretary.

In the spring, state insurance commissioners started giving insurers the option of canceling existing individual plans for 2014, since the coverage required under Obama's law is more robust. Some states directed insurers to issue cancellations. Large employer plans that cover most workers and their families are unlikely to be affected.

The Department Of Health And Human Services also announced that an outside company would take over the role of general contractor to fix the website. That company would basically take over from the government agency that was running it.

The Associated Press contributed to this report.

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