Senior White House officials on Nov. 14 held a background briefing via teleconference previewing President Obama’s announcement to allow insurers to continue offering individual insurance plans for another year even if they do not comply with the law’s rules for minimum benefits. Read the full transcript of the call below.

OPERATOR: Ladies and gentlemen, thank you for standing by. Welcome to the White House conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will be given at that time.

Should you require assistance during this call, you may press start and then zero, and an operator will assist you offline.

At this time, I will turn the conference call over to your host with the White House, Ms. Tara McGuinness. Please go ahead.

MCGUINNESS: Thank you very much. I appreciate everyone joining us this morning on this call. Later this morning, the president will make a statement on the health care law, but we wanted to give you a preview of some of the -- some of what he will announce. But before we start, I would like to do just a few elements of housekeeping.

First, the terms of this call. This call is on background, embargoed until the president’s speaks. You can use the information from officials on our call as “senior White House officials,” but cannot cite their names or titles directly. And I’d ask that everyone keep this embargo until the president speaks. That goes for any -- any of the information offered or material.

Finally, we do want to let you know, even though you -- we’re asking you not to cite their names or titles directly, who you’ll be hearing from this morning. I’m joined by (inaudible) and (inaudible).

Again, I want to remind you all that this is on background and embargoed until the president speaks. We’ll start the call right now with some brief remarks. I’m going to turn it over to (inaudible), and as we wrap up, we’ll talk more about Q&A in a few moments.

Thank you very much.

SENIOR WHITE HOUSE OFFICIAL: Good morning, everyone. Let me begin by saying that last week the president directed his team to come up with a fix to address the confusion and the challenges that have come across based upon some of the cancellation letters that people throughout the country had been receiving from insurance companies.

Later today, the president at 11:45 is announcing an administrative fix that essentially says the following, that the Affordable Care Act for purposes of this year will not require insurance companies to upgrade their plans for individuals who have been in these existing plans so far. So, in other words, we’re announcing that insurers can offer consumers the option to renew their 2013 health plans in 2014 without change, allowing these individuals to keep their plans.

Essentially, this is an extension of the grandfathering principle both to people whose plans have changed since the law took effect and to people who purchased individual plans since the law took effect.

SENIOR WHITE HOUSE OFFICIAL: What that means is that, insurers can continue to offer this coverage that would otherwise be canceled for their current policyholders and give their policyholders the opportunity to re-enroll with this coverage. Now, there are two important things that we will require from insurance companies who -- who take this step. One is that they notify consumers what protections these renowned (ph) plans do not include. So to the extent that they are allowing folks to stay in these plans for an additional year, ti’s important that consumers be given the information about the benefits and protections that they will not be receiving.

And two, to notify consumers that they will have new options available on the marketplace that offer better coverage and that there will be tax credits available for many people, and in some instances, Medicaid that is available for most people.

Now, what this option does not allow -- which is at the core of what the Republicans have proposed in the Upton plan is to allow these older non-compliant plans to be sold to new customers in 2014. That opening up essentially of -- of this market that doesn’t have the basic protections to an entire new universe of people is what would undermine the Affordable Care Act and the marketplaces, which is precisely what Speaker Boehner said this morning in relation to the Upton bill where he said that this was part of their targeted strikes to undermine and undue the Affordable Care Act.

And so, in conclusion, what the president is announcing today is an administration solution that will give consumers more information, additional choices including keeping their old plans.

And the contrast is clear.

We are willing to work with anyone who is interested in making sure that the Affordable Care Act works for Americans throughout the country, that when we implement and identify challenges, that the interest is in fixing the problems that arise. And this step today is in the interest of fixing some of the challenges that have arisen versus the strategy of targeted strikes that are not intended to basically fix a problem, but to once again re-litigate the political fight around the Affordable Care Act.

With that, to go into some of the details about the underlying policy, let me turn it over to my colleague (inaudible).

SENIOR WHITE HOUSE OFFICIAL: Sure, and I’ll just say this fairly quickly so we can get to questions, which is what we will be doing today is the Department of Health and Human Services will be sending a letter to state insurance commissioners talking about the fact that for -- in the interest of trying to ensure a smooth transition to the marketplace and to the new reforms in 2014, insurers in the individual and small group market can renew their policies through next year for current enrollees and would not be considered out of compliance with the market reforms that take effect next year.

So effectively, he’s saying to insurance commissioners that, we will -- for the purposes of transition -- in the interest of insuring that individuals have choices, allow these plans to be renewed, but only under the two circumstances that (inaudible) just spoke about, that there is -- you know, notice is given to these individuals about any changes that are available to them through the marketplace, what specific market reforms are not reflected in the -- in renewed policies as well as their different rights.

SENIOR WHITE HOUSE OFFICIAL: We will encourage state insurance commissioners to follow this lead. And we also will work different types of regulations to help ensure that there is minimal effect on premiums of these changes for 2015.

SENIOR WHITE HOUSE OFFICIAL: All right. Well, I’ll now turn it over to the operator to move us towards -- towards Q&A. I just want to remind people about the term for social media and for reporting that we’re asking that this -- the information on this call is both on background and embargoed until the president speaks.

If you have any additional questions, let me just make sure everyone has the address for the White House press office. That’s (ph).

And, with that, we’ll take the first question.

OPERATOR: Thank you.

Ladies and gentlemen, if you wish to queue up for a question, you may press star and then 1 on your touch tone phone. You will hear a tone indicating you’ve been placed in queue. You may then remove yourself from the queue at any time by pressing the pound key.

So, again, for your questions, you may press star and then 1, at this time.

We’ll take our first question in queue from Roberta Lansing (ph) with Reuters.

Please go ahead.

QUESTION: Hi. What happens if someone has already had their plan canceled? Are you asking insurance companies to call those people back or contact them to get them reinstated or to offer this?

And what -- to what extent have you worked with insurance companies on this fix?

SENIOR WHITE HOUSE OFFICIAL: Thank you for the question, Roberta.

So, for individuals who have already had received these letters of cancellation, we are essentially saying to these insurance companies that the Affordable Care Act does not require them to upgrade plans for these individuals and at that point they have the ability to reach back out to those individuals and renew their plans for an additional year.

(inaudible), you wanted to talk about the second part of the question?

SENIOR WHITE HOUSE OFFICIAL: Sure, and I think that we have heard both from insurance companies and from insurance commissioners in the past weeks about their interest in this sort of flexibility. It may not be taken by all insurance companies and by all state insurance commissioners. At the same time, we wanted to make it clear that it is an option, that we will be suspending enforcement of these market provisions for 2014 for the purpose of allowing these renewals for current enrollees.

This is not for people who, beginning in 2014, will have the new options available in the marketplace, be able to potentially access tax credits. That remains distinct. This is solely an option and discretion given to insurers for current enrollees.

OPERATOR: Thank you.

Our next question in queue will come from the line of Dylan Scott (ph) with Talking Points Memo (ph).

Please go ahead.

QUESTION: Hi, guys. Thanks for doing the call.

One, I wanted to ask, given everything that’s already been linked -- leaked, if we could do away with the embargo?

And, two, if you could talk a little bit about what you guys see as the legal basis for being able to do this administratively as opposed to requiring any action from Congress?


SENIOR WHITE HOUSE OFFICIAL: Hey, Dylan. I’m gonna ask that the content of this call remains embargoed. And I’m gonna turn it over to (inaudible) for your next question.

SENIOR WHITE HOUSE OFFICIAL: HHS is -- will be using its enforcement discretion to allow for this transition. Enforcement discretion can be used generally in transitions as well as a bridge towards legislation.

This is something that has been used, for example, with the deferred action for childhood arrivals policy, pending immigration reform. And it is a temporary policy potentially with an extension depending on circumstances, as a means to ensure ultimate implementation of the very important market reforms that go into effect in 2014.

SENIOR WHITE HOUSE OFFICIAL: And -- and Dylan (ph), just one final point on this. And I think that the word “transition” is very, very important here to think about what this -- what this is. For example, because we are saying that this is for an existing universe of people who presently have plans, who may want to keep their plans, but now will be given information about alternatives that they have, as well as benefits that are being left at the table, this is a very defined universe.

One additional point about this that I think is important to think about the difference between this approach and what Republicans in the House are pushing with the Upton bill is that we already know that in any given year between 50 to 67 percent of people use the individual market as a bridge in terms of insurance. And so 50 to 67 percent have their plan for one year or less.

And so what this is essentially saying is that fine, for folks in this market, the individual and the small-group market, who have these plans right now that don’t comply with the new minimum benefits of the Affordable Care Act, we will exercise discretion in terms of enforcement to say to these insurance companies and state insurance commissioners that the Affordable Care Act will not require insurance companies to upgrade plans for this universe of people.

OPERATOR: Thank you. Our next question in queue will come from the line of Sarah Clift (ph) with the Washington Post. Please go ahead.

QUESTION: Hi. Thanks for taking my question.

I’m curious if you could talk about how you see this sitting with kind of the spirit and idea of the Affordable Care Act? My understanding was the whole hope was to get people to upgrade plans and to ensure that there are really robust, comprehensive benefits. And this seems to cut against that. So I was hoping you could talk a little bit about why these plans, you know, which traditionally were not thought to be ACA compliant, are now, you know, being allowed to continue for an additional year, what the benefits are of that.

SENIOR WHITE HOUSE OFFICIAL: Thanks, Sarah. This is (inaudilble). I would argue that we still believe that the health insurance marketplace is offering improved choices, different standardized levels of benefits, better protections, lower premiums than what was projected, and in some states like New York, lower premiums than are available today.

In addition, individuals will have access to financial assistance should they qualify. We still expect that the marketplaces will be robust and a good place for many people in the individual market to go today, about half of whom will qualify for some sort of financial assistance. But we also expect as we get the website fixed and we really ramp up our outreach and enrollment activity, we’ll get a whole bunch of uninsured people and young adults and others coming in to make the marketplace work.

So this is a policy that’s helping that subset, that slice of people for whom they may not qualify for a tax credit. They may be in a particular circumstance where their benefits are significantly changing. And they would like the option of continuing -- renewing the plan they’re in today. This is not a blanket policy. It’s not letting old policies be sold next year. It’s not reopening a lot of the protections that have already been provided, but it is allowing the slice of people for whom the cancellation policy is perceived as a burden to have this option.

SENIOR WHITE HOUSE OFFICIAL: And again, just to echo, Sarah, what we just said about what we know about the individual market and how it’s used as a transition. As folks move out of the market and either go into the large-group market or into the small-group market, you know, then they will again benefit from these new protections that (sic) have in place.

SENIOR WHITE HOUSE OFFICIAL: And the one key distinction I think that really goes to the heart of the Affordable Care Act is that, prior to this, when people received cancellation letters from insurance companies, when you’re one in the one in five people who are denied coverage because of a pre-existing condition, when you are subject to 15 percent to 20 percent increases, when you were medically underwritten you had no other options or alternatives.

And so it is important to look at this action as a transition, as a way to help smooth the transition from -- from where we were to where we are going while we continue to build out and develop the marketplaces which we’re very optimistic about.

MODERATOR: Thank you.

Our next question in queue that will come from the line of a Zeke Miller with Time Magazine, please go ahead.

QUESTION: Thanks for doing the call.

I was hoping that you could talk a little bit about the timing of this fix. This problem isn’t one that you only realized maybe last week or maybe (inaudible) a bit and the political calculation here, but the notion of people not -- of these plans not being able to be offered was, you know, going -- we don’t -- it certainly goes back (inaudible) 2011.

So why the change now?

What specifically is this a response to, and is it responding to the politics here, or is there a legitimate policy concern here that you’re trying to address?

SENIOR WHITE HOUSE OFFICIAL: Zeke, thanks for the question.

Look, we have said from the beginning that as we implement this, you know, we’re gonna identify challenges and issues and when we see them we’re going to fix them. And, as the president him-said (sic) said last week, Look, when people are getting letters during this transition phase that -- that are saying that their plans are canceled, all throughout the country, the president was very, very clear. He said, “Look, address this problem. Fix this problem.”

And what we are doing today is essentially allowing for a better and a smoother transition for this group of individuals to move from the existing individual market and some elements of a smaller group market that are subject to this to these new and better plans.

Look, it’s -- this is not abstract, this is folks -- based on people and the reaction that people have. And we’re being responsive to that as we implement and transition from what the health care -- health insurance industry used to be, which was one that predicated not on bringing new customers in, but to cherry picking and making sure that you only had the healthiest people, leaving everybody else out to something that’s based upon choice and competition and quality of product.

And so, that’s -- that speaks to the timing of this.

(inaudible), do you have anything to add?

SENIOR WHITE HOUSE OFFICIAL: Yeah, just that I think it’s important to make a distinction which is this is a policy targeted and very targeted towards those individuals who are in these policies today, it is not allowing these policies to be sold to people who are not in those plans today.

As of today, these people now have new choices in the marketplaces with, again, different tiers of benefits, different protections, important consumer protections as well as access to the -- to a tax credit potentially if they’re eligible.

So this is about offering people in these plans today an option under certain circumstances to continue that coverage is (ph) not opening up those products are being sold today to new customers.

MODERATOR: Thank you.

Our next question in queue will come from the line of Adam Agner (ph) with CNN, please go ahead.

QUESTION: Hi, thanks for taking my call.

I have -- I have two quick questions.

What happens in the state where insurance commissioners have said that all new plans have to be ACA compliant? Have you gotten any commitment from some of those commissioners that -- you said you hoped that they would take this and take the advice, but have you gotten any commitment that they will?

And does this have any effect on your efforts to diversify the new insurance pool in the market pool, that wouldn’t some of these people who are getting kicked off plans, aren’t they the younger, healthier people that you need to recruit to join the new exchange?

SENIOR WHITE HOUSE OFFICIAL: Well, Adam, thanks for the question. Let me take a first shot, and then (inaudible) will follow up.

Look, again, as we said at the beginning, what we are saying today is that there is nothing in the Affordable Care Act that will require for this year insurance companies to upgrade these plans for these individuals.

It’s a matter of federal law and the Affordable Care Act.

What this means is that, as has always been the case, the state insurance commissioners and insurance companies have, by force of state law and decisions that they make from a business perspective, the ability to continue to make decisions about benefits. For this group of people, benefit structure and a variety of other, different requirements, nothing changes relative to -- relative to that.

And we don’t have commitments -- to the second part of your first question -- from state insurance commissioners.

In terms of the efforts to diversify, again, let me begin with the nature of the individual market and the tremendous churn in the market, which is a function of how people generally use the individual market.

But one additional point on this is that there is a misconception that the individual market is overwhelmingly made of -- made up of young people. To the contrary, what you find in the individual market is, I believe, in terms of individual policies, 40 percent are made up of people between the age of 45 and 64, versus only, I think, a quarter or less, of people 25 or 26 years of age and younger.

Similarly, in terms of family plans, over 50 percent of the family plans on the individual market are for folks at the ages of 45 to, you know, 64, versus a very, very, very, very small component within the -- within -- within the individual market.

And so, those two factors in terms of churn and then in terms of the composition of the market speak to the diversification.

One final point on this is that you cannot look at this in isolation anymore, because now, throughout the country, people have choices that they didn’t have before.

And so, both the inclusion of tax credits, the expansion of Medicaid in places where they have, the ability to compare from one insurer to another, is just an enticement that from a consumer perspective stands, regardless of the decision that’s been made today.

(inaudible), anything to add on those two points?

SENIOR WHITE HOUSE OFFICIAL: No, I think just some of the numbers are compelling. A recent Kaiser Family Foundation study found that 17 million Americans will be eligible potentially for a tax credit in this market. That’s a pretty rich number of people who should help make the diversification work.

And just a second, with (inaudible) demographic (inaudible), in addition to being more skewed to an older population in the individual market today, those young adults who are in this market are disproportionately eligible for tax credits. We recently did some analyses that showed just how many young adults can qualify for discounted premiums.

And I just want to keep in mind that we really do think that many other features of the marketplace will attract people, will make it a good deal, and will make it work.

OPERATOR: Thank you. Our next question in queue will come from the line of Rebecca Adams (ph) with CQ. Please go ahead.

QUESTION: Thank you for taking the call.

Does potentially make it harder when the transition does happen, especially since the re-insurance money and some other protections runs out after three years?

And I wanted to follow up on (inaudible) comment that possibly this could be extended. What would determine if there is an extension?

And I also wondered, since there’s no requirement that insurers and insurance companies will push it, can you tell us more about your projections of how many insurers will do this and how many policyholders might be helped by this?

SENIOR WHITE HOUSE OFFICIAL: Hi (inaudible). This is (inaudible).

(inaudible) the first question. So the Affordable Care Act does, obviously, make major changes to how people get coverage and the type of protections they get. And in recognition of that, the law includes three programs, including re-insurance, to help ensure that risk works (inaudible) the risk balance works.

So in addition to re-insurance we have this risk corridor program, which I’m just going to spend a minute describing. Risk corridors are designed exactly for the types of uncertainty that we’re trying to address with (inaudible) different policies. It basically says, insurers are setting their premiums for next year. Those premiums for 2014 are done. But to the extent that, given all the uncertainty about who’s coming in and what’s happening in this market, there’s a risk-sharing that goes on so that if premiums are way off one direction or the other the government will share in that risk.

We are going to -- and it says this in our policy announcement today -- look at our risk corridor program to ensure that it adequately adjusts for the fact that there may be some people in these extended plans and not in the marketplace. And this program will help balance any of that unintended consequences.

OPERATOR: Thank you.

Our next question in queue will come from the line of Julie Rovener (ph) with NPR.

Please go ahead.

QUESTION: Hi. Thanks for taking my question.

Are -- are these plans gonna be allowed to raise premiums? And how long is it gonna take to get those new premiums to be approved by regulators? Will those all be possible to do before these plans actually go out of existence? SENIOR WHITE HOUSE OFFICIAL: So -- it is a good question and one that I think is gonna be best directed to insurers and to insurance commissioners. I will say that I think we’ve seen, you know, recently in several states some insurance commissioners talking about if not acting on some sort of extensions of policies. It is harder to get a new policy approved than to get an extension of an existing policy, so I think as a pragmatic matter it’s gonna be up to the insurance commissioners and the states.

All that said, we do want to, as (inaudible) articulated, let that be a choice with this policy so that it is not a requirement but an option for these plans to -- to take up the new consumer protections in the law.

OPERATOR: Thank you.

Our next question in queue -- that will come from the line of Shauna (ph) Thomas with NBC News.

Please go ahead.

QUESTION: Hey, guys. Thanks for having the call.

This is kind of a simple question, but how do we know we’re not just going to have all of these same problems come enrollment period next year? There’s still going to be (inaudible) be people who want to keep their plans. There are still going to be people who complain. Like, how are you going to avoid that?

SENIOR WHITE HOUSE OFFICIAL: And that just reminds me of the part -- or the two questions ago that I forgot to answer, which is the transition. So we do begin this whole process believing that the marketplace will work. And when we get the website going and we get our outreach going, we will have a good, robust number of people signing up for health insurance in the marketplace.

All that said, there are some unknowns. So what we are doing is having this policy be a one-year renewal, renew these policies through 2014, until the next open enrollment in October of 2014, but reserve the right to look and see what’s going on, see what the trends are, see what the market is like. And if we need to do further adjustments, we can do it.

As (inaudible) said, though, we know that people don’t stay in the individual market for that long. They come in. They’re looking for a gap. They’re looking for a bridge. When they find different types of coverage, they often go there. And we anticipate that even if we did nothing, many of these people would be transitioning to the marketplace.

But as a reminder, you know, our 2014 premiums are set. I mean, they’re on the books. If you go to you can look at the plan compare to see what the premiums are. Those premiums are set and we’re building in this risk-corridor (ph) policies and other policies to ensure that anything that’s happening now with the risk pool as a result of these actions will be adjusted for. So we are trying to prepare for the 2015 rates as well.

OPERATOR: Thank you. Our next question in queue will come from the line of Norm Levy (ph) with the Los Angeles Times. Please go ahead.

QUESTION: Hi, there. Thanks -- thanks so much for taking the call.

What -- insurers presumably have already been able to do this. What is different other than your encouraging them? There’s no regulation or anything that is necessary -- right? -- for insurers to offer a continuation of these plans, correct?

SENIOR WHITE HOUSE OFFICIAL: That’s actually not exactly right. So, let me give you an example. So, if I were an individual and my insurance company decided that it would rather cancel my plan and offer a new plan next year to be compliant with all the new market reforms in the Affordable Care Act, that’s the way -- that person would go to a different plan in January.

The -- the change is that if that insurance company wanted, instead of canceling and offering a different plan, to continue the current plan, to so-called renew that on January 1, it could do that. Without this action, the insurance company could not renew that plan. It would have to offer a plan on January 1 that is adhering to the new consumer protections.

OPERATOR: Thank you. We’ll take one last question. That will come from Tracy John (ph) with the Boston Globe. Please go ahead.

QUESTION: Thank you very much for taking my question.

I’m wondering, going back to when the promise was made that people would be able to hold onto their insurance plans if they liked them, why was that ever made when it was clear that that is not what was going to happen? It didn’t happen in Massachusetts.

SENIOR WHITE HOUSE OFFICIAL: I’m sorry. Could you repeat that question?

QUESTION: Yes. I’m wondering why the president -- who -- why was the communication made that people would be able to keep their plans if they liked them, when it was clear that that would not happen because there were going to be plans that were not going to meet the standards under the new law?

SENIOR WHITE HOUSE OFFICIAL: Sure. I mean, I would just describe it this way is that, you know, the law, indeed, does say that, you know, if I were a person in a health insurance plan when the law was enacted, and my plan kind of goes along, doesn’t significantly change, I could still be in that plan today. I could still be in that plan next year and year after with no changes, with the new consumer protections not applying until either I left that plan and chose a new plan or that plan decided to significantly change its benefits.

So, that is there. But I will flip around to what (inaudible) said, removing from the abstraction to the reality of a number of people getting these cancellation letters, and preferring to keep their plan that they have now, than going to some of the marketplace plans. Some people are going to go, but some people have expressed the interest in keeping their plan in a renewal. And just to clarify what that renewal means is that, you know, if my plan gets renewed in January, I can keep it through the end of December of next year. If my plan renews in March, I can keep it through March of 2015, just to answer the previous question.

This is about doing a -- you know, a similar type of grandfathering than what we did in 2010 to give the people in the marketplace today -- in the individual marketplace today -- another choice.

OPERATOR: Thank you.

And at this time, I’ll turn the conference back over to (inaudible) for closing comments.

SENIOR WHITE HOUSE OFFICIAL: Yes. Thank you very much, everyone, for joining us today. And we appreciate everyone holding this as a background call, embargoed, until the president speaks and makes this announcement in detail in the next 30 minutes.

Thanks very much for everyone for joining us today. If you have further questions, you can always

But we appreciate you honoring that this is an embargoed call until the president speaks.

Thanks again, everyone.

OPERATOR: Thank you.

And, ladies and gentlemen, that does conclude your conference call for today. We do thank you for you participation and for using AT&T Executive Telephone (inaudible).

You may now disconnect.