SHARE 1 11 COMMENTMORE

Tennessee's insurance commissioner said Friday insurers operating in the state will likely be allowed to continue to offer plans that don't comply with changes mandated by health care reform in 2014.

President Obama, facing criticism even from fellow Democrats over problems with the health care law, said Thursday that companies can continue providing coverage for a year under policies that do not comply with new requirements.

Under the shift, Obama said insurers should be permitted to continue to sell individual coverage plans deemed substandard under the health care law to existing customers. Without the change, many existing plans would have been banned beginning next year, and the president's announcement was an attempt to quell a public and political furor triggered by millions of cancellation notices.

His announcement left insurance companies and individual states to determine how to respond to the President's decision. BlueCross BlueShield of Tennessee, the state's largest insurer for individual policyholders, has not announced its plans yet. Earlier, the company said it was planning to notify 66,000 policyholders that their coverage was being canceled in 2014 because it did not meet new federal guidelines under the Affordable Care Act.

Julie Mix McPeak, Commissioner of the Tennessee Department of Commerce and Insurance, said the state is still exploring all the implications of the extension, but said it will likely offer the option for insurers.

"The one-year extension of existing plans has major implications for consumers and the health insurance market in Tennessee," McPeak said in a prepared statement. "I believe in providing Tennessee consumers with a variety of insurance options and I support allowing Tennesseans to keep the coverage they were assured they could. While I continue to analyze the multiple effects of yesterday's extension, increasing Tennesseans' options in the evolving health insurance marketplace is a primary goal. Know that we continue to review the President's policy change and are awaiting additional guidance from the U.S. Department of Health and Human Services to ensure we have all the information needed to implement this order."

BlueCross BlueShield of Tennessee, the state's largest underwriter of individual plans, said Thursday:

"Since 2010, we've been committed to complying with the health care law. We're continuing to monitor these developments to understand the president's new direction. We'll seek guidance from our state and federal regulators before we can clearly define any actions we may take."

Early Friday afternoon, the House approved legislation to let insurance companies sell individual coverage to all comers, even if it falls short of standards in "Obamacare." That differs from the President's proposal, which would only offer the extension to existing policyholders.

The vote was 261-157, and came after GOP lawmakers said the bill would ease the plight of millions of consumers reeling from cancellation notices.

The White House threatened a veto if the measure reaches President Barack Obama's desk. Democratic leaders worked furiously to minimize defections on the issue, while mindful it is likely to figure prominently in next year's elections with control of Congress at stake.

The vote came as Obama arranged a meeting at the White House with insurance company CEOs, and as the industry and state insurance commissioners began adjusting to an abrupt change in policy he announced on Thursday.

The cancellation issue is only part of the woes confronting the president and his allies as they struggle to sustain the health care law. Obama has repeatedly apologized for a dismal launch of www.healthcare.gov , which consumers in 36 states were supposed to use beginning on Oct. 1 to sign up for new coverage. The website is so riddled with problems that the administration disclosed earlier this week that fewer than 27,000 signups have been completed -- a number that Republicans noted is dwarfed by the flood of cancellations issued due to the law. Compounding the administration's misery, the poor quality of the website has made it that much harder for consumers receiving cancellation notices to shop for alternative plans. It is unclear what, if anything, the administration is prepared to do to alleviate the threat of a break in coverage for those consumers. In addition, there already are signs of resistance among state insurance commissioners, who would have to agree to allow Obama's proposed change to take effect. At the same time, industry officials and commissioners alike warn that premium prices could rise beginning with 2015 coverage plans if the changes go into effect.

The Associated Press contributed to this report.

SHARE 1 11 COMMENTMORE