"I do not believe his proposal is a good deal for the state of Washington," state Insurance Commissioner Mike Kreidler said in a statement.
The National Association of Insurance Commissioners, which has helped implement several key pieces of the Affordable Care Act, including its new insurance regulations and marketplaces, also said it was "concerned" by Obama's proposal.
"This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond," the NAIC said in a statement.
Obama's announcement appears to have made some difference among skittish Democrats. The tone on Capitol Hill was noticeably friendlier on Thursday than it had been on Wednesday.
"I think it's moving in the right direction.... I didn't think the target was, basically, people that had insurance. It was to target the people who were uninsured. So, I think they acknowledged that," Sen. Joe Manchin, D-W.Va., said as he left a closed-door meeting with White House officials.
But there is a risk that this plan to alleviate political pressure — if it works — could have negative implications for the policy framework of Obamacare.
The Affordable Care Act did not cause insurance cancellations by accident. It set new standards for insurance plans and tried to move people into policies that met those standards. A complicated, interconnected tangle of policies all serve the same goal: Building a functional marketplace for individual coverage, where sick people and healthy people are pooled together.
Obama's latest proposal, though, would let some healthy people stay out of the risk pool for another year. That certainly would help healthy and reasonably wealthy individuals pay a lower premium — because it's an extension of the uneven marketplace Obamacare was intended to correct.
It won't allow people to purchase new policies that don't comply with the law, only to keep existing ones. And insurance companies have already adjusted their business models to sell compliant plans, so they might not even be interested in reviving policies they have already canceled, just for a year. Those factors could blunt any negative effects of Obama's announcement and mitigate the damage to the law's exchanges.
But if people take advantage of Obama's plan, it could threaten the underlying structure of Obamacare and cause premium hikes next year, the American Academy of Actuaries said.
"Changing the ACA provisions could alter the dynamics of the insurance market, creating two parallel markets operating under different rules, thereby threatening the viability of insurance markets operating under the new rules," said Cori Uccello, the Academy's senior health fellow.
That's largely why insurance companies were so angry over the proposal. They opposed the Affordable Care Act, but have complied with its requirements and adapted their business models to the law's new insurance exchanges. Insurers have created new plans that cover essential health benefits, are available to people with preexisting conditions, and so on.
