President Obama announced an administrative fix for people who are getting notices from their insurance companies that they can keep their existing plans for one more year, even if those plans are not compliant with the consumer protections in the ACA.
However, insurers will have to notify customers of the consumer protections which are not in the plan, and also that those customers may be eligible for tax subsidies and/or lower rates in their state marketplaces.
This is the White House administrative answer to the Upton proposal allowing insurers to sell these plans to anyone and the Landrieu proposal to extend the grandfather provision. It is intended as a rule to smooth the transition into the ACA.
That notice requirement is the key to the entire transition. Insurers have not been clear to their policyholders about options available to them under the ACA when they've sent their notifications of cancellation. If insurers opt to continue these existing policies in a state that allows it, they must clearly inform consumers of the deficiencies in their old products with regard to pre-existing conditions, deductibles, and coverage, which places the spotlight right back on the group responsible for the current controversy.
Why do this at all? Because Republicans are tossing a hissy fit and Congressional Democrats are concerned about the political hit they're taking, sacrificing all unity in order to cover their own hides. This neutralizes Fred Upton's "targeted strike" at the ACA, preserves Obama's promises made, and gives Dems some political cover heading into the 2014 midterms. From a political standpoint, it's the right move. From a policy standpoint, it isn't ideal but it does force insurers to actually inform their policyholders about the benefits of the ACA, which is a good thing.
As I write, RNC Communications Director Sean Spicer is complaining that the White House is giving Democrats cover for not having to take a vote on the Upton bill, saying it's unconstitutional for the White House to do this unilaterally. Of course it's not unconstitutional; it's a transition rule, and transition rules are used all the time, especially in broad, sweeping legislation. Any Dem who voted for Upton's bill would be voting for everything everyone hates about the private insurance industry.