Even as President Barack Obama on Friday said more than one million Americans had enrolled for insurance under the federal health care law, a controversial 11th-hour decision that could potentially free millions of others from the mandate caused more confusion.
Just days before Monday's deadline to enroll for coverage that starts Jan. 1, about 900,000 Californians whose existing individual policies are being canceled learned they could claim a "hardship exemption" instead of signing up for often more expensive plans.
The switch comes weeks after officials at Covered California, the state's health care exchange, refused to back Obama's earlier recommendation to allow those canceled policy holders to keep their plans for another year. But the new exemption, which the Obama administration quietly released Thursday, applies in every state.
The administration's latest health care rule change allows people whose coverage was canceled -- because it didn't meet new minimum standards -- to obtain cheaper catastrophic coverage. That usually requires policyholders to pay initial medical costs of up to $6,000 before comprehensive coverage kicks in.
Under the rule change, if that catastrophic coverage is also too expensive, individuals with canceled policies could claim an exemption from the law's "individual mandate," which requires most Americans to have coverage or face a fine next year.
Anne Gonzales, a spokeswoman for Covered California, said the exchange is still assessing the impact of the ruling.
She said the exchange will post information about the new federal guideline on the coveredca.com website by Monday. Anyone whose plan was canceled, she said, should contact an insurance carrier if they want to buy a plan that offers minimal coverage.
Currently, Gonzales said, the exchange offers catastrophic policies only to anyone age 18 to 30 or anyone who could demonstrate they have suffered a hardship, such as the death of a close family member or a bankruptcy filing in the past six months. Now, a canceled plan qualifies as a hardship, Gonzales said.
While the catastrophic plans may offer lower premiums, Gonzales said consumers should review what their out-of-pocket costs would be under such a slimmed down policy.
As well, at least one-third of the 900,000 Californians whose plans were canceled are eligible for subsidies; catastrophic plans would not offer any tax credits, she said.
Tom Waschura, a Portola Valley engineer whose family's insurance plan was canceled, said Friday that he was just about to pay the bill for his new insurance plan, but he now will hold off to see if catastrophic plans would be less expensive.
Spokesmen for the four largest health insurers selling plans on Covered California said their companies are still studying the new guideline and what it will mean for their customers.
The last-minute change resulted from a request by six Democratic senators for greater flexibility to deal with people whose individual policies were canceled after the president repeatedly had promised Americans that the health law allowed them to keep their coverage if they liked it.
That false promise triggered a wave of public anger and political pressure that caused Obama to allow canceled policies to be extended for another year if insurers and state regulators allow it. But only about half the states decided to implement the president's fix, which led the six lawmakers to seek the hardship exemption.
Administration officials don't expect many people to request the exemption, because they estimate that fewer than 500,000 people with canceled policies will lack coverage on Jan. 1.
Obama defended the rule change as a necessary adjustment to an unforeseen problem.
"When you try to do something this big, affecting this many people, it's going to be hard," he said.
The Associated Press and McClatchy Newspapers contributed to this report.