By Kevin Liptak
CNN White House Producer
(CNN) -- The Obama administration will allow Americans who had their health insurance policies canceled due to the introduction of the Affordable Care Act an option to get new coverage or an exemption from the mandate that they buy insurance.
The change is aimed at preventing people who are losing their plans to at least get catastrophic coverage, if they want it and can afford it, so they don't fall through the health care cracks at the start of the year.
For those who can't afford it, the administration is holding out the possibility of a so-called hardship exemption from the requirement under Obamacare that Americans have insurance or pay a penalty.
"This is a commonsense clarification of the law. For the limited number of consumers whose plans have been canceled and are seeking coverage, this is one more option," Health and Human Services spokesperson Joanne Peters told CNN.
Some Americans who held individual policies from private insurers began receiving cancellation notices this fall due to the fact that their coverage did not meet stepped up requirements of Obamacare.
The issue became a political hot potato for President Barack Obama, who repeatedly assured Americans when promoting his new health reforms that they could keep their old policies if they liked them better.
The controversy exacerbated the rocky October 1 roll out of the federal website, HealthCare.gov, where consumers can shop for and purchase insurance. Initial enrollment totals fell way short of projections. Although they have risen since, the site is not problem-free. It was down again on Friday.
The administration has tweaked its rules regarding the timeframe for consumers to purchase insurance. The deadline is Monday for coverage by January 1, and March 23 for coverage by the end of the year.
There are fewer than 500,000 people whose health insurance plans were canceled and haven't yet signed up for new ones, administration officials said.
The latest change was supported by key moderates in the Senate -- mostly Democrats, some of whom face tough reelection campaigns next year.
"As a result, this clarifies an option that will help those consumers who have had their plans canceled transition more smoothly into the marketplace. We will closely monitor how the administration implements this option, and we remain committed to proposing responsible solutions," they said in a statement.
Republicans, who did not support the Affordable Care Act when it went through Congress in 2010, have sought to derail it since. They have made its most recent troubles the centerpiece of their campaigns against Democrats in midterm elections.
Sen. Marco Rubio, R-Florida, called the new option a "fire sale of cheap insurance" that was an irresponsible approach for fixing a "broken program."
Insurance companies also reacted negatively.
"This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers," said America's Health Insurance Plans' president and CEO Karen Ignagni.
The organization is a trade group for the insurance industry.
Administration officials said they expect an enrollment surge ahead of Monday's sign-up deadline.
And while officials say enrollment appears "robust and strong" in December, they anticipate a drop-off in January, when a looming deadline isn't spurring people to sign up.
The next spike, they say, will come in March, which is the last month Americans can enroll in insurance before being assessed a penalty.
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