TODAY   |  December 20, 2013

Insurance companies upset over Obamacare exemption

NBC News political director Chuck Todd tells TODAY that the move to extend exemptions to all people who haven’t yet enrolled in a new healthcare plan is not going over well with insurance companies.

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This content comes from Closed Captioning that was broadcast along with this program.

>> now from a late night surprise announcement from the obama administration. another fix for the botched health care roll out, specifically for the cancelled policies. the white house now says people that don't get insurance in 2014 can apply to get a one year exemption from penalties and can now buy catastrophic coverage. this is something previously not permitted under the law. let's get to chuck todd . good morning to you. it seemed to me that insurers were blind sided by this announcement and not happy about it.

>> well, they're not happy about it at all. let me explain what's going on here. part of it has to do with the fact that the administration fears that all the people that got cancellation notices about their policies because they didn't meet the new requirements that the law allows, not a lot of them signed up for new health care . the deadline is three days away. if you want to have coverage begin on january 1st and not have it uninterrupted. so they feared these folks weren't going to do it. a little part of the law that allowed for folks under 30 to have a hardship clause and get an exemption to buy these catastrophic policies, now they're opening it up to anybody that has gotten a cancellation notice. but here's the issue, if you got a cancellation notice and you think the plans are too expensive but you aren't eligible for any subsidy you can claim hardship and use your cancellation notice as the reason. if you think the policies are too expensive, you don't qualify for the subsidies but never got one of these notices, you can't file. so it creates an arbitrary, two classes of people that don't have insurance and that's what the insurance companies are upset about. they say it's messing up the marketplace, here at the very last minute and it really messes up their finances. remember, they're being asked to cover more than they ever had to cover before. this is why there's such confusion at the last minute.

>> and needless to say, more ammunition for the critics of the law. chuck todd , thank