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U.S. President Barack Obama talks about the Affordable Care Act in the Brady Press Briefing Room at the White House in Washington, November 14, 2013. Credit: Reuters/Larry Downing

Obama, under political pressure, allows renewals of canceled health plans

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Obama, under political pressure, allows renewals of canceled health plans
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WASHINGTON (Reuters) - President Barack Obama bowed to political pressure from his fellow Democrats on Thursday and announced a plan to let insurers renew for one year the health plans for Americans whose policies would be otherwise canceled due to Obamacare.

The administrative fix offered by Obama would allow insurers to offer certain health plans in 2014 that do not meet the minimum requirements of the health reform law, but require the companies to spell out how the policies are substandard and what alternatives are available.

"This fix won't solve every problem for every person, but it's going to help a lot of people," Obama told reporters at the White House. "We're going to do everything we can to help Americans who received these cancellation notices."

The shift was designed to end a growing revolt by Democrats worried that the canceled policies, as well as the botched rollout of the government website for enrollment in the exchanges, would threaten their re-election bids in 2014.

Before the law went into effect, Obama had repeatedly promised that Americans who liked their health insurance plans could keep them under the Affordable Care Act, commonly known as Obamacare.

The law included a grandfathering provision that allowed insurers to maintain policies that did not meet new minimum coverage levels required by Obamacare, as long as the policies were created before the law was enacted in 2010.

But insurers did not maintain many of these plans or created new ones that would not meet the new requirements, and several million people have since been notified their current plans will be canceled.

It was unclear how much relief Obama's fix would provide. Senior White House officials said it will be up to state insurance commissioners to allow the Obamacare fix to go ahead, and it will be up to insurance companies whether to renew plans that have already been canceled.

Republicans have opposed the healthcare law as an unwarranted expansion of the federal government, and on Thursday, U.S. House of Representatives Speaker John Boehner said: "The only way to fully protect the American people is to scrap this law once and for all."

Some Democrats had threatened to support legislative bills that would have re-opened the healthcare law to halt the growing wave of policy cancellations.

The House of Representatives will vote on Friday on a bill by Republican Fred Upton of Michigan to allow insurers to offer canceled plans, but Democrats objected to some provisions that they said would undermine the Obamacare market and drive premiums up. Democrats said they will offer their own alternative approach.

Obama's shift raised new questions, however, about the possible impact on insurance pools because it would potentially reduce the number of young and healthy people purchasing policies through Obamacare insurance exchanges.

Enrollment figures released by the administration on Wednesday indicated that only 106,000 people have enrolled for health plans through the exchanges, a tiny fraction of the hoped-for millions.

The low figure, while expected because of technical glitches on the government website, showed how far the administration has to go to build an individual market of millions of consumers in 2014 to keep the healthcare program financially viable.

(This story has been refiled to insert dropped word 'and' in first paragraph)

(Writing by John Whitesides; Editing by Ross Colvin and Grant McCool)

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